Market Roundup
- Oil falls amid rise in U.S. inventories
- Gold gains on virus resurgence fears
Economic Data Ahead
- (0500 ET/0900 GMT) EZ Industrial Production w.d.a. (YoY)(Mar)
- (0500 ET/0900 GMT) EZ Industrial Production s.a. (MoM)(Mar)
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index eased, extending previous session losses after U.S. President Donald Trump again pushed the Federal Reserve to adopt negative interest rates. The greenback against a basket of currencies traded down at 99.97, having touched a high of 100.44 on Tuesday, its highest since April 24.
EUR/USD: The euro consolidated within narrow ranges as investors kept a wary eye on climbing coronavirus infection rates in China and on the risks of countries moving to reopen their economies too soon. The European currency traded flat at 1.0852, having touched a low of 1.0766 on Thursday, its lowest since April 24. Investors’ attention will remain on a series of economic data from the Eurozone economies and EZ industrial production, ahead of the U.S. producer price index and Fed Powell's speech. Immediate resistance is located at 1.0865, a break above targets 1.0890. On the downside, support is seen at 1.0822 (5-DMA), a break below could drag it below 1.0800.
USD/JPY: The dollar steadied after falling from a 2-1/2 week peak in the prior session as investor sentiment turned cautious ahead of Federal Reserve Chairman Jerome Powell’s speech on economic issues amid rising speculation the United States could adopt negative interest rates. On Tuesday, the pair weakened on the back of data showing U.S. consumer prices dropped 0.8 percent in April, the biggest since the Great Recession, raising the spectre of deflation. The major was trading flat at 107.14, having hit a low of 105.98 on Wednesday, its lowest since Mar. 17. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. consumer price index and Fed Quarles speech. Immediate resistance is located at 107.40, a break above targets 107.76. On the downside, support is seen at 106.80, a break below could take it near at 106.60.
GBP/USD: Sterling surged after falling to a 5-week low on continued confusion over government plans to ease lockdown measures, the worst COVID-19 death toll in Europe and revived Brexit risks. The major traded 0.4 percent up at 1.2294, having hit a low of 1.2244 earlier, it’s lowest since April 7. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2324, a break above could take it near 1.2355. On the downside, support is seen at 1.2230, a break below targets 1.2205. Against the euro, the pound was trading 0.3 percent up at 88.22 pence, having hit a low of 88.54 earlier, it’s lowest since April 21.
AUD/USD: The Australian dollar rose, halting a 2-day losing streak after data showed Australia's Wage Price Index rose 2.1 percent year-on-year in the first quarter, as expected, following the preceding quarter's 2.2 percent rise, while the Melbourne Institute and Westpac Bank index of consumer sentiment jumped a record 16.4 percent in May, recouping most of April's 17.7 percent decline. The Aussie trades 0.1 percent up at 0.6475, having hit a high of 0.6561 on Tuesday, it’s highest since April 30. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6506, a break above could take it near 0.6530. On the downside, support is seen at 0.6429, a break below targets 0.6399.
Equities Recap
Asian shares tumbled as fears about a second wave of coronavirus infections gripped financial markets.
MSCI's broadest index of Asia-Pacific shares outside Japan slumped 0.4 percent.
Tokyo's Nikkei fell 0.5 percent to 20,267.05 points, Australia's S&P/ASX 200 index rallied 0.4 percent to 5,421.90 points. South Korea's KOSPI surged 0.9 percent to 1,940.42 point.
Shanghai composite index rose 0.2 percent to 2,898.05 points, while CSI 300 index traded 0.2 percent up at 3,968.25 points.
Hong Kong’s Hang Seng traded 0.05 percent higher at 24,256.55 points. Taiwan shares added 0.5 percent to 10,938.27 points.
Commodities Recap
Crude oil prices declined on worries about a possible second wave of coronavirus cases in countries starting to ease lockdowns, while industry data showed a rise in U.S. crude inventories. International benchmark Brent crude was trading 0.1 percent lower at $29.40 per barrel by 0552 GMT, having hit a high of $32.20 last week, its highest since April 14. U.S. West Texas Intermediate was trading 0.7 percent up at $26.01 a barrel, after rising as high as $27.95 last week, its highest since April 9.
Gold prices gained amid concerns that a second wave of coronavirus infections may be emerging in many countries. Spot gold rose 0.1 percent to $1,704.42 an ounce by 0558 GMT, having touched a high of $1,723.65 on Friday, its highest since Apr. 27.U.S. gold futures gained 0.1 percent to $1,708.10.
Treasuries Recap
The Japanese government bonds were little changed as investors stayed away from taking big positions ahead of U.S. Federal Reserve Chairman Jerome Powell’s speech later in the day. The benchmark 10-year JGB futures fell 0.03 point to 152.28. The 10-year JGB yield rose 0.5 basis point to minus 0.005 percent, while the 20-year JGB yield was flat at 0.325 percent. In the superlong zone, the 30-year JGB yield and the 40-year JGB yield were both steady at 0.455 percent and 0.465 percent, respectively. At the short end, the two-year JGB yield fell 0.5 basis point to minus 0.175 percent, while the five-year yield rose 0.5 basis point to minus 0.120 percent.
