Market Roundup
- Oil climbs after sharp drop in U.S. crude stocks
- Gold steadies above $1,800 on virus fears
Economic Data Ahead
- (0400 ET/0800 GMT) Italy Consumer Price Index (YoY)(Jun)
- (0400 ET/0800 GMT) Italy Consumer Price Index (EU Norm) (MoM)(Jun)
- (0400 ET/0800 GMT) Italy Consumer Price Index (MoM)(Jun)
- (0400 ET/0800 GMT) Italy Consumer Price Index (EU Norm) (YoY)(Jun)
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index plunged to an over 1-month trough after three U.S. states reported new record daily deaths from COVID-19. Federal Reserve officials warned the U.S. economy faces a longer recovery from the pandemic, and economic pain could still worsen as cases increase. The greenback against a basket of currencies traded 0.1 percent lower at 96.12, having touched a low of 96.06 earlier, its lowest since June 11.
EUR/USD: The euro rallied to a 4-month high on hopes European Union leaders may agree at its summit later this week on stimulus and deepening fiscal integration to shield the economy from the pandemic. The European currency traded 0.5 percent up at 1.1405, having touched a high of 1.1423 earlier, its highest since March 10. Investors’ attention will remain on a series of data from Eurozone economies, ahead of the U.S. industrial production, capacity utilization, and import and export price index. Immediate resistance is located at 1.1460, a break above targets 1.1501. On the downside, support is seen at 1.1345, a break below could drag it below 1.1297 (10-DMA).
USD/JPY: The dollar eased against the Japanese yen after the Bank of Japan kept monetary policy on hold, signalling a pause after delivering stimulus twice so far this year. However, the downside in the pair appears limited after data showed U.S. consumer prices rebounded 0.6 percent month-on-month, the most in nearly eight years, in June, easing worries about deflationary pressures from the economic downturn. Investors now focus on positive results from an early-stage trial of a coronavirus vaccine. The major was trading 0.05 percent down at 107.19, having hit a high of 107.43 on Tuesday, its highest since July 8. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. industrial production, capacity utilization, and import and export price index. Immediate resistance is located at 107.56, a break above targets 107.90. On the downside, support is seen at 107.04, a break below could take it near at 106.78.
GBP/USD: Sterling surged, retreating from a 1-week low hit in the prior session, as investors await more news on Britain’s negotiations with the European Union on concluding a trade deal for the post-Brexit period. The major traded 0.3 percent higher at 1.2584, having hit a low of 1.2479 on Tuesday, it’s lowest since July 7. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2623, a break above could take it near 1.2670. On the downside, support is seen at 1.2482 (21-DMA), a break below targets 1.2437 Against the euro, the pound was trading 0.2 percent up at 90.60 pence, having hit a low of 91.12 on Tuesday, it’s lowest since June 30.
AUD/USD: The Australian dollar advanced to a 1-month peak, as progress on a COVID-19 vaccine boosted investor risk sentiment. The major trades 0.5 percent up at 0.7005, having hit a high of 0.7018 earlier, it’s highest since June 10. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7042, a break above could take it near 0.7064. On the downside, support is seen at 0.6950 (10-DMA) a break below targets 0.6913 (21-DMA).
Equities Recap
Asian shares surged on news Moderna Inc’s experimental vaccine for COVID-19 showed early progress.
MSCI's broadest index of Asia-Pacific shares outside Japan rallied 0.53 percent.
Tokyo's Nikkei rose 1.6 percent to 22,945.50 points, Australia's S&P/ASX 200 index gained 1.9 percent to 6,052.90 points. South Korea's KOSPI surged 0.9 percent to 2,203.59 points.
Shanghai composite index eased 1.2 percent to 3,374.57 points, while CSI 300 index traded 0.9 percent down at 4,762.92 points.
Hong Kong’s Hang Seng traded 0.3 percent lower at 25,409.79 points. Taiwan shares shed 0.05 percent to 12,202.85 points.
Commodities Recap
Crude oil prices surged following a sharp decline in U.S. crude inventories, while the market await next steps from a meeting later in the day on the future level of output cuts by OPEC and its allies. International benchmark Brent crude was trading 0.2 percent up at $43.06 per barrel by 0544 GMT, having hit a low of $41.29 on Friday, its lowest since July 1. U.S. West Texas Intermediate was trading 0.2 percent lower at $40.45 a barrel, after falling as low as $38.56 on Friday, its lowest since June 29.
Gold prices eased but held firm above the psychological $1,800 level, as worries over surging coronavirus cases and simmering U.S.-China tensions supported the safe-haven metal's demand. Spot gold was trading 0.1 lower at $1,808.01 per ounce by 0548 GMT, having hit a high of $1,818.09 last week, its highest since September 2011. U.S. gold futures eased 0.1 percent to $1,811.40.
Treasuries Recap
The Japanese government bond yields edged higher, with the benchmark 10-year JGB futures falling 0.03 point to 152.11. The 10-year JGB yield rose 0.5 basis point to 0.025 percent, while the 20-year JGB yield rose 1 basis point to 0.430 percent. The 30-year JGB yield rose 1 basis point to 0.600 percent. In the middle of the yield curve, the five-year yield rose 0.5 basis point to minus 0.105 percent. At the short end, the two-year JGB yield was unchanged at minus 0.145 percent.
The Australian 10-year bond futures firmed 2 ticks to 99.0900.
