Market Roundup
- Oil steadies on hopes for U.S. stimulus agreement
- Gold rallies as softer dollar
Economic Data Ahead
- (0500 ET/0900 GMT) EZ Producer Price Index (YoY)(Aug)
- (0500 ET/0900 GMT) EZ Producer Price Index (MoM)(Aug)
- (0500 ET/0900 GMT)EZ Unemployment Rate(Aug
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index declined to a 1-week low, as investors await the U.S. initial jobless claims data due later in the day and the non-farm payrolls report on Friday for clues about the pace of recovery in the U.S. economy. The greenback against a basket of currencies traded 0.2 percent down at 93.68, having touched a low of 93.64 earlier, its lowest since September 22.
EUR/USD: The euro rose, hovering towards a 1-week peak hit in the previous session as European Central Bank President Christine Lagarde set the scene on Wednesday for a change of strategy that could align the ECB with the U.S. Federal Reserve, possibly including a commitment to let inflation overshoot after it has been low for too long. French central bank chief Francois Villeroy de Galhau added that the ECB’s aim is not too different from that of the U.S. central bank and should produce similar results. The European currency traded 0.2 percent up at 1.1743, having touched a high of 1.1755 on Wednesday, its highest since September 22. Investors’ attention will remain on series of economic data from the Eurozone economies, EZ Markit manufacturing PMI, producer price index and unemployment rate, ahead of the U.S. unemployment benefit claims, personal consumption expenditures price index, personal spending, personal income figures, manufacturing PMI by Markit and ISM, construction spending and Fed official speech. Immediate resistance is located at 1.1778 (21-DMA), a break above targets 1.1800. On the downside, support is seen at 1.1699 (5-DMA), a break below could drag it below 1.1684 (10-DMA).
USD/JPY: The dollar nudged higher as robust U.S. data and fresh hopes for U.S. fiscal stimulus boosted investors confident about economic recovery prospects. U.S. Treasury Secretary Steven Mnuchin on Wednesday said talks with House Speaker Nancy Pelosi made progress on the long-awaited COVID-19 relief legislation. Meanwhile, jobs figures showing U.S. private employers stepped up hiring harder than forecast last month and that midwest manufacturing grew faster than expected also supported investor risk sentiment. The major was trading 0.1 percent up at 105.47, having hit a high of 105.80 on Wednesday, its highest since September 15. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims, personal consumption expenditures price index, personal spending, personal income figures, manufacturing PMI by Markit and ISM, construction spending and Fed official speech. Immediate resistance is located at 105.70, a break above targets 106.01. On the downside, support is seen at 105.23, a break below could take it near at 105.05.
GBP/USD: Sterling rose, extending gains for the sixth straight session, after the Norwegian government said that Norway and Britain have reached a bilateral agreement on fisheries, before Britain leaves the European Union’s single market at the end of the year. While Norway is not a member of the EU, it is integrated into the bloc’s common market and must negotiate separate post-Brexit trade relations with Britain. The major traded 0.2 percent higher at 1.2935, having hit a high of 1.2942 on Wednesday, it’s highest since September 21. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2973, a break above could take it near 1.3010. On the downside, support is seen at 1.2875, a break below targets 1.2854. Against the euro, the pound was trading 0.1 percent down at 90.78 pence, having hit a high of 90.25 on Monday, it’s highest since September 8.
AUD/USD: The Australian dollar rose to an over 1-week peak after a poll by Reuters showed the country's central bank will likely hold key rates at a record low 0.25 percent at its monthly policy meeting on Tuesday, though a majority expect a cut in November. Last week, Deputy Governor Guy Debelle signalled the need for accommodative settings while listing some policy options under consideration by the RBA. The Aussie trades 0.4 percent up at 0.7188, having hit a high of 0.7189 earlier, it’s highest since September 22. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7218 (21-DMA), a break above could take it near 0.7235. On the downside, support is seen at 0.7136, a break below targets 0.7113.
NZD/USD: The New Zealand dollar rose to a 1-week high as signs of progress in negotiations over fresh U.S. stimulus measures boosted investor sentiment. The Kiwi traded 0.2 percent lower at 0.6638, having touched a high of 0.6640 earlier, its highest level since September 23. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6658 (21-DMA), a break above could take it near 0.6687. On the downside, support is seen at 0.6585, a break below could drag it below 0.6555.
Equities Recap
Asian shares surged on renewed hopes for fresh U.S. stimulus measures, although mounting uncertainty ahead of America’s presidential election limited upside.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3 percent.
Tokyo's Nikkei declined 0.1 percent to 23,184.93 points, Australia's S&P/ASX 200 index rose 0.9 percent to 5,872.90 points.
Regional trade was thinned as markets closed in Greater China and South Korea.
Commodities Recap
Crude oil prices surged, extending previous session gains after U.S. lawmakers postponed a vote on a $2.2 trillion coronavirus relief package in hopes of reaching a bipartisan deal. International benchmark Brent crude was trading 0.9 percent up at $42.34 per barrel by 0452 GMT, having hit a low of $40.39 on Tuesday, its lowest since September 15. U.S. West Texas Intermediate was trading 0.8 percent higher at $40.25 a barrel, after falling as low as $38.44 on Tuesday, its lowest since September 16.
Gold prices gained as a softer dollar and progress on another U.S. coronavirus relief package offset pressure from upbeat U.S. private payrolls data. Spot gold was trading 0.5 percent higher at $1,894.72 per ounce by 0454 GMT, having hit a high of $1902.34 on Wednesday, its highest since September 23. U.S. gold futures were down 0.3 percent at $1,900.60.
Treasuries Recap
The U.S. Treasury yields rallied, with the benchmark 10-year note yield trading at 0.697 percent and the 30-year yield at 1.474 percent.
