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Asia Roundup: Aussie gains as lockdowns ease, greenback halts 3-day rally on dismal U.S. data, Asian shares nudge higher - Monday, May 18th, 2020

Market Roundup

  • Oil prices jump more than $1
  • Gold jumps to highest since October 2012

Economic Data Ahead

  • No Major Economic Data Scheduled

Key Events Ahead

  • No Significant Events Scheduled

FX Beat

DXY: The dollar index eased, halting a 3-day winning streak, as data out on Friday showed U.S. retail sales and industrial production both plunged in April, putting the economy on track for its deepest contraction. The greenback against a basket of currencies traded 0.05 percent down at 100.31, having touched a high of 100.56 on Thursday, its highest since April 24.

EUR/USD: The euro rose, extending previous session gains, as the greenback eased after downbeat U.S. data highlighted the COVID-19 pandemic’s impact on the economy. The European currency traded up at 1.0821, having touched a low of 1.0774 on Thursday, its lowest since May 7. Investors’ attention will remain on the U.S. NAHB housing market index, amid a lack of data from the Eurozone economies. Immediate resistance is located at 1.0845 (21-DMA), a break above targets 1.0860. On the downside, support is seen at 1.0782, a break below could drag it below 1.0755.

USD/JPY: The dollar gained, reversing most of its previous session losses, as investor optimism about the re-opening of economies around the world lifted commodity prices and exporters’ currencies. The major was trading 0.1 percent up at 107.17, having hit a high of 107.76 last week, its highest since Apr. 23. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. NAHB housing market index. Immediate resistance is located at 107.40, a break above targets 107.76. On the downside, support is seen at 106.87, a break below could take it near at 106.63.

GBP/USD: Sterling plunged to a 7-1/2 week low as a combination of Brexit risks and a coronavirus-induced economic slowdown added pressured on the British currency. The major traded down at 1.2106, having hit a low of 1.2075 earlier, it’s lowest since Mar. 26. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2165, a break above could take it near 1.2225 (5-DMA). On the downside, support is seen at 1.2001, a break below targets 1.1973. Against the euro, the pound was trading 0.1 percent down at 89.43 pence, having hit a low of 89.58 on Wednesday, it’s lowest since March 31.

AUD/USD: The Australian dollar rebounded from a 1-week low as oil futures rose and Dalian iron ore futures hit a record peak. The Aussie trades 0.5 percent up at 0.6444, having hit a low of 0.6402 on Friday, it’s lowest since May 7. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6487, a break above could take it near 0.6530. On the downside, support is seen at 0.6402, a break below targets 0.6372.

Equities Recap

Asian shares rose as countries’ efforts to re-open their economies stirred hopes the world was nearer to emerging from recession.

MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.1 percent.

Tokyo's Nikkei rallied 0.5 percent to 20,133.73 points, Australia's S&P/ASX 200 index gained 1.1 percent to 5,460.50 points. South Korea's KOSPI surged 0.5 percent to 1,937.11 point.

Shanghai composite index rose 0.2 percent to 2,875.42 points, while CSI 300 index traded 0.3 percent up at 3,922.91 points.

Hong Kong’s Hang Seng traded 0.4 percent higher at 23,897.70 points. Taiwan shares shed 0.7 percent to 10,740.55 points.

Commodities Recap

Crude oil prices surged by more than 2 percent to their highest in more than a month, supported by ongoing output cuts and signs of gradual recovery in fuel demand. International benchmark Brent crude was trading 2.05 percent higher at $33.54 per barrel by 0520 GMT, having hit a high of $33.88 earlier, its highest since April 9. U.S. West Texas Intermediate was trading 3.4 percent up at $30.79 a barrel, after rising as high as $30.89 earlier, its highest since March 16.

Gold prices rallied over 1 percent to its highest in more than seven years as dismal U.S. data underscored how badly the COVID-19 pandemic has damaged the economy. Spot gold was trading 1.2 percent up at $1,763.55 per ounce by 0553 GMT, having touched a high of $1,764.19 earlier, its highest since Oct. 12, 2012. U.S. gold futures gained 0.8 percent to $1,770.50.

Treasuries Recap

The Japanese government bond prices rose, with the five-year cash JGB yield slipping 2 basis points (bps) to minus 0.140 percent. The benchmark 10-year JGB futures rose 0.19 point to 152.48, while the 10-year JGB yield fell 1 bp to minus 0.015%.percent The two-year JGB yield fell 1 bp to minus 0.180 percent. In the superlong zone, the 20-year JGB yield and the 30-year JGB yield fell half a basis point each to 0.340 percent and 0.470 percent, respectively.

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