America’s Roundup: Dollar struggles as rising oil prices lift commodity currencies, Wall Street jumps, Gold eases off highs, Oil jumps to two-month high on easing lockdowns, positive vaccine results-May 19th 2020

Market Roundup

• U.S. West Texas Intermediate crude hits two-month high

• U.S. 30-year yields rise to 8-week high

• U.S. 10-year yields climb to 2-week peak

• French 3-Month BTF Auction -0.549% previous

• French 6-Month BTF Auction -0.505% previous

• French 12-Month BTF Auction -0.496% previous

• US May NAHB Housing Market Index37, 33 forecast, 30 previous

• US May 3-Month Bill Auction 0.130%,    0.125% previous

• US May 6-Month Bill Auction 0.150%,    0.155% previous

Looking Ahead - Events, Other Releases (GMT)    

•22:45 New Zealand PPI Input (QoQ) (Q1) 0.1% previous

•22:45 New Zealand PPI Output (QoQ) (Q1) 0.4% previous

• 01:30 Australia Invest Housing Finance (MoM) -1.9% previous

• 01:30 New Zealand April RBNZ Offshore Holdings   46.40% previous

Looking Ahead - Events, Other Releases (GMT)

• 1:30 Australia RBA Meeting Minutes

Currency summaries

EUR/USD: The euro rose against dollar on Monday after Germany and France issued a call for a 500 billion-euro recovery fund for Europe and proposed to allow the European Commission to borrow money on markets to finance the fund. The Franco-German deal, described by French president Emmanuel Macron as a major step forward, seeks to break the impasse over joint euro debt and act as a blueprint for a wider EU agreement. Immediate resistance can be seen at 1.0916 (61.8% fib), an upside break can trigger rise towards 1.0974 (Higher BB).On the downside, immediate support is seen at 1.0887 (50 % fib), a break below could take the pair towards 1.0824 (38.2% fib).

GBP/USD: Sterling strengthened against the dollar on Monday  as broad dollar weakness helped the currency shrug off talk of negative interest rates from the Bank of England and a stalemate in Brexit negotiations.Britain and the EU’s chief negotiators on Friday gave downbeat assessments of the latest round of Brexit negotiations, while the Bank of England’s chief economist refused to rule out the possibility of taking interest rates below zero to prop up the country’s economy. Immediate resistance can be seen at 1.2269(50% fib ), an upside break can trigger rise towards 1.2300 (Psychological level).On the downside, immediate support is seen at 1.2171(38.2%fib), a break below could take the pair towards 1.2073 (23.6% fib).

USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Monday as higher oil prices weaker greenback across the board boosted Canadian dollar. Brent crude reached as much as $34.35 a barrel on Monday, its highest since April 9, and was last up 5.3% at $34.22. U.S. West Texas Intermediate crude was up 7.1% at $31.51 a barrel  a two-month high. At  (2024 GMT), the Canadian dollar was trading 0.06% higher at 1.3942 to the greenback. The currency, which touched on Tuesday an 11-day high at 1.3941, traded in an range of 1.3988 to 1.4081. Immediate resistance can be seen at 1.3946 (23.6% fib ), an upside break can trigger rise towards 1.4006 (38.2%fib ).On the downside, immediate support is seen at 1.3895 (11 DMA), a break below could take the pair towards 1.3800 (Psychological level).

.USD/JPY: The dollar strengthened against the Japanese yen on Monday after data showed Japan slipped into recession for the first time since 2015. Japan’s economy contracted at an annualised rate of 3.4% in January-March, government data showed on Monday, marking the second straight quarter of contraction and meeting the technical definition of recession, due to the coronavirus pandemic.The dollar was a touch firmer against the Japanese yen at 107.31 yen per. Strong resistance can be seen at 107.57(23.6% fib), an upside break can trigger rise towards 106.00 (Psychological level).On the downside, immediate support is seen at 107.25 (38.2% fib  ), a break below could take the pair towards 107.00 (23.6% fib).

Equities Recap

European shares bounced on Monday after their worst week in two months, as investors hoped for a gradual economic recovery with many countries easing coronavirus-led lockdowns.

UK's benchmark FTSE 100 closed up by 5.67percent, Germany's Dax ended up by 4.29 percent, France’s CAC finished the day up by 5.16 percent.

U.S. stocks surged on Monday, with the S&P 500 hitting a 10-week high, as encouraging early data from a potential coronavirus vaccine trial boosted sentiment, with investors also hoping for stimulus to cushion the economic blow from the pandemic.

Dow Jones closed up by 3.85 percent, S&P 500 ended up by 3.15 percent, Nasdaq finished up by 2.45 percent.

Treasuries Recap

U.S. Treasury yields advanced on Monday, as investors grew optimistic about a potential vaccine that could help fight the coronavirus pandemic, boosting overall risk appetite as stocks and oil gained as well.

U.S. 30-year yields climbed to eight-week peaks, while those on the 10-year rose to two-week highs, and the two-year advanced to a one-week peak. The rise in long-dated yields steepened the yield curve to its widest spread in two months.

Commodities Recap

Gold retreated on Monday from a more than seven-year high, as stocks and oil surged on optimism surrounding the trial of a potential COVID-19 vaccine.

 Spot gold  fell 0.7% to $1,728.72 per ounce by 1:35 p.m. EDT (1735 GMT), after hitting its highest since October 2012 at $1764.55. U.S. gold futures   settled 1.3% lower at $1,734.40.

Oil prices on Monday jumped to their highest in over two months on positive early results on a potential coronavirus vaccine, optimism about a resumption in economic activity and signs producers were following through on planned output reductions.

Brent   futures for July delivery rose $2.31, or 7.1%, to $34.81 a barrel, while U.S. West Texas Intermediate (WTI) crude   rose $2.39, or 8.1%, to $31.82.