Market Roundup
- Gold slips on dollar rebound
- New Zealand’s Food Price Index slumps 1.0% in August
- New Zealand’s Electronic Card Retail Sales rallies 7.3% YoY in September
Economic Data Ahead
- (0500 ET/0900 GMT) EZ ZEW Survey – Economic Sentiment(Oct)
- (0500 ET/0900 GMT) Germany ZEW Survey – Current Situation(Oct)
- (0500 ET/0900 GMT) Germany ZEW Survey – Economic Sentiment(Oct)
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index surged as a widening lead by Democratic presidential candidate Joe Biden over President Donald Trump is leading investors to expect big stimulus after the election. The greenback against a basket of currencies traded 0.1 percent up at 93.14, having touched a low of 93.01 on Monday, its lowest since September 21.
EUR/USD: The euro declined, extending previous session losses, after the European Central Bank Vice President Luis de Guindos stated that the euro zone economy is losing momentum and the ECB will react accordingly, citing December’s macro-economic projections as a key guide for future policy moves. The European currency traded 0.1 percent down at 1.1798, having touched a high of 1.1830 on Friday, its highest since September 21. Investors’ attention will remain on series of economic data from the Eurozone economies, and EZ ZEW Survey, ahead of the U.S. consumer price index and monthly budget statement. Immediate resistance is located at 1.1848, a break above targets 1.1870. On the downside, support is seen at 1.1778 (5-DMA), a break below could drag it below 1.1757 (21-DMA).
USD/JPY: The dollar rose after tumbling to a 1-week low in the prior session, as investors stuck to hopes that there will be large U.S. fiscal stimulus after the November 3 election to boost a pandemic-hit economy. On Monday, a White House spokeswoman said that Senate Republicans will go along with what President Donald Trump wants in legislation. The major was trading 0.05 percent up at 105.38, having hit a low of 105.24 on Monday, its lowest since October 5. Investors’ will continue to track the broad-based market sentiment ahead of the U.S. consumer price index and monthly budget statement. Immediate resistance is located at 105.40 (10-DMA), a break above targets 105.70. On the downside, support is seen at 105.09, a break below could take it near at 104.84.
GBP/USD: Sterling eased after rising to a near 5-week peak in the previous session, as British Prime Minister Boris Johnson announced new coronavirus restrictions. Johnson set out a three-tier system of local lockdown measures in England, including a ban on households mixing indoors in some areas, designed to curb the spread of coronavirus. The major traded 0.1 percent lower at 1.3048, having hit a high of 1.3082 on Monday, it’s highest since September 8. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3110, a break above could take it near 1.3131. On the downside, support is seen at 1.2999, a break below targets 1.2964 (5-DMA). Against the euro, the pound was trading flat at 90.40 pence, having hit a high of 90.28 in the prior session, it’s highest since September 28.
AUD/USD: The Australian dollar plunged, weighed down by media reports China has stopped taking shipments of Australian coal. Trade industry reports late last week suggested that some Chinese ports had been told not to accept Australian thermal and metallurgical coal, and that Australian shipments were being sold along to other markets at the last minute. The Aussie trades 0.3 percent down at 0.7184, having hit a high of 0.7243 on Friday, it’s highest since September 21. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7234, a break above could take it near 0.7252. On the downside, support is seen at 0.7156, a break below targets 0.7130.
NZD/USD: The New Zealand dollar steadied after easing from a 3-week top in the previous session amid mixed economic data. The country's REINZ House Price Index edged down from 1.9 percent to 0.2 percent in September, whereas Electronic Card Retail Sales rallied 7.3 percent versus 0.5 percent forecast and -0.8 percent prior month reading. Moreover, the Food Price Index for August slumped 1.0 percent in August, below 0 percent expected and 0.7 percent in prior month. The Kiwi traded 0.1 percent higher at 0.6652, having touched a high of 0.6673 on Friday, its highest level since September 22. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6690, a break above could take it near 0.6720. On the downside, support is seen at 0.6609 (5-DMA), a break below could drag it below 0.6587.
Equities Recap
Asian shares plunged as Beijing’s tensions with Washington renewed after the White House moved forward with three sales of advanced weaponry to Taiwan.
MSCI’s broadest index of Asia-Pacific shares outside Japan declined 0.1 percent.
Tokyo's Nikkei rose 0.2 percent to 23,601.78 points, Australia's S&P/ASX 200 index rallied 1.05 percent to 6,195.70 points. South Korea's KOSPI fell 0.01 percent to 2,401.67 points.
Shanghai composite index eased 0.05 percent to 3,357.46 points, while CSI 300 index traded 0.3 percent up at 4,837.82 points. Taiwan shares shed 0.05 percent to 12,947.13 points.
Commodities Recap
Crude oil prices declined, extending losses for the third straight session after a force majeure at Libya’s largest oilfield was lifted, a Norwegian strike affecting production ended and U.S. producers began restoring output after Hurricane Delta. International benchmark Brent crude was trading 0.05 percent down at $41.70 per barrel by 0506 GMT, having hit a high of $43.54 on Friday, its highest since September 18. U.S. West Texas Intermediate was trading 0.1 percent lower at $39.43 a barrel, after rising as high as $41.44 on Friday, its highest since September 18.
Gold prices eased following a slight rebound in dollar, while investors held on to hopes of a U.S. stimulus package being eventually released. Spot gold declined 0.6 percent to $1,911.79 per ounce by 0509 GMT, having hit a high of $1933.29 on Monday, its highest since September 21. U.S. gold futures were down 0.3 percent to $1,923.
Treasuries Recap
The U.S. Treasury yields declined, with the benchmark 10-year note yield trading at 0.762 percent and the 30-year yield at 1.556 percent.
