Market Roundup
- Oil prices inch higher as U.S. stockpile drop
- Gold eases after Powell dismiss chances of negative U.S. rates
- Australia witnesses largest-ever drop in jobs in April
Economic Data Ahead
- (0400 ET/0800 GMT) Italy Global Trade Balance(Mar)
- (0400 ET/0800 GMT) Italy Trade Balance EU(Mar)
- (0400 ET/0800 GMT) EZ Economic Bulletin
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index surged after U.S. Federal Reserve Chairman Jerome Powell dismissed speculation that policymakers will adopt negative interest rates. The greenback against a basket of currencies traded 0.1 percent down at 100.28, having touched a high of 100.44 on Tuesday, its highest since April 24.
EUR/USD: The euro declined, extending previous session losses after data released yesterday showed Eurozone industrial production suffered its steepest monthly fall on record in March as coronavirus containment measures severely hit activity across the bloc. The European currency traded 0.1 percent down at 1.0807, having touched a low of 1.0766 last week, its lowest since April 24. Investors’ attention will remain on a series of economic data from the Eurozone economies, ahead of the U.S. unemployment benefit claims, and import and export price index. Immediate resistance is located at 1.0846, a break above targets 1.0860 (10-DMA). On the downside, support is seen at 1.0782, a break below could drag it below 1.0755.
USD/JPY: The dollar plunged below 10-DMA after data showed U.S. producer prices fell in April by the most since 2009, leading to the largest annual decline in nearly 4-1/2 years. Moreover, U.S. Federal Reserve Chairman Jerome Powell ’s dour view on the recovery of an economy battered by the coronavirus pandemic further dented the bid tone around the pair. The major was trading 0.2 percent down at 106.80, having hit a low of 105.98 last week, its lowest since Mar. 17. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims, and import and export price index. Immediate resistance is located at 107.20, a break above targets 107.49. On the downside, support is seen at 106.60, a break below could take it near at 106.35.
GBP/USD: Sterling slumped to an over 1-month low as traders weighed the benefit of government support to shield the economy from the COVID-19 pandemic against the high financial costs of doing so. The major traded 0.3 percent down at 1.2197, having hit a low of 1.2187 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 1.2280, a break above could take it near 1.2312 (5-DMA). On the downside, support is seen at 1.2160, a break below targets 1.2130. Against the euro, the pound was trading 0.2 percent down at 88.59 pence, having hit a low of 88.77 earlier, it’s lowest since April 21.
AUD/USD: The Australian dollar tumbled to a 1-week low after data showed the largest-ever decline in jobs in April as much of the economy was locked down to tackle the coronavirus, suggesting more monetary and fiscal easing may be needed to support the economy. The economy's employment fell by a staggering 594,300 in April, above forecasts of a 575,000 drop, while the jobless rate rose to 6.2 percent from 5.2 percent in March. The Aussie trades 0.2 percent down at 0.6434, having hit a low of 0.6420 earlier, 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 0.6398, a break below targets 0.6372.
Equities Recap
Asian shares plunged as worries grew about a second wave of coronavirus infections and a gloomy assessment from the U.S. Federal Reserve Chief dashed hopes for a quick economic recovery.
MSCI's broadest index of Asia-Pacific shares outside Japan slumped 1.0 percent.
Tokyo's Nikkei declined 1.7 percent to 19,914.78 points, Australia's S&P/ASX 200 index tumbled 1.7 percent to 5,328.70 points. South Korea's KOSPI slumped 1.09 percent to 1,919.15 point.
Shanghai composite index fell 0.8 percent to 2,875.98 points, while CSI 300 index traded 0.9 percent down at 3,932.38 points.
Hong Kong’s Hang Seng traded 1.4 percent lower at 23,839.23 points. Taiwan shares shed 1.5 percent to 10,780.88 points.
Commodities Recap
Crude oil prices rose, boosted by an unexpected drop in U.S. crude stocks, but gains were capped by concern over a potential second wave of cases. International benchmark Brent crude was trading 0.5 percent higher at $29.51 per barrel by 0547 GMT, having hit a high of $32.20 last week, its highest since April 14. U.S. West Texas Intermediate was trading 0.05 percent up at $26.18 a barrel, after rising as high as $27.95 last week, its highest since April 9.
Gold prices declined as U.S. Federal Reserve Chairman Jerome Powell downplayed the possibility of negative interest rates, although his warning of an extended period of weak economic growth limited downside. Spot gold was down 0.2 percent to $1,714.18 per ounce by 0552 GMT, having touched a high of $1,723.65 on Friday, its highest since Apr. 27. U.S. gold futures rose 0.3 pecent to $1,721.60.
Treasuries Recap
The U.S. benchmark 10-year yield was down 3.1 basis points at 0.6606 percent, while the 2-year U.S. Treasury yield was down 1.2 basis points at 0.1609 percent.
