Market Roundup
- Gold slips on easing lockdowns
- Oil prices dip on supply concerns
- Australia retail sales surge in March
Economic Data Ahead
- (0400 ET/0800 GMT) EZ Markit Services PMI(Apr)
- (0400 ET/0800 GMT) EZ Markit PMI Composite(Apr)
- (0430 ET/0820 GMT) UK Markit Construction PMI(Apr)
- (0500 ET/0900 GMT) EZ Retail Sales (YoY)(Mar)
- (0500 ET/0900 GMT) EZ Retail Sales (MoM)(Mar)
Key Events Ahead
- N/A European Commission releases Economic Growth Forecasts
FX Beat
DXY: The dollar index surged despite U.S. Federal Reserve Vice Chair Richard Clarida warned that economic data would get much worse before getting better. Investors await the U.S. ADP National Employment Report of private U.S. payrolls that could project the damage to be revealed on Friday in the official U.S. government measure of jobs in April. The greenback against a basket of currencies traded 0.05 percent up at 99.85, having touched a low of 98.57 on Monday, its lowest since Mar. 30.
EUR/USD: The euro declined to a 1-week low after Germany’s highest court gave the European Central Bank three months to justify purchases under its bond-buying programme, or lose the Bundesbank as a participant in a scheme aimed at cushioning the economic blow from the coronavirus. The European currency traded 0.1 percent down at 1.0821, having touched a high of 1.1019 on Friday, its highest since April 1. Investors’ attention will remain on a series of economic data from the Eurozone economies and EZ retail sales, ahead of the U.S. ADP employment change. Immediate resistance is located at 1.0861 (10-DMA), a break above targets 1.0888. On the downside, support is seen at 1.0803, a break below could drag it below 1.0783.
USD/JPY: The dollar slumped to a 7-week low as U.S. President Donald Trump again pressed China about the origins of the outbreak that has killed more than a quarter of a million people since it started in the Chinese city of Wuhan late last year. Investors now await a response from Beijing to his latest comments, which last week included a threat of fresh tariffs on Chinese goods. The major was trading 0.1 percent down at 106.38, having hit a low of 106.20 earlier, its lowest since Mar. 17. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. ADP employment change. Immediate resistance is located at 106.93, a break above targets 107.19. On the downside, support is seen at 106.09, a break below could take it near at 105.64.
GBP/USD: Sterling consolidated within narrow ranges as investors await the Bank of England meeting on Thursday, which could provide fresh catalysts for movement in the pound. The major traded flat at 1.2434, having hit a high of 1.2643 on Thursday, it’s highest since April 14. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2483 (5-DMA), a break above could take it near 1.2516. On the downside, support is seen at 1.2405, a break below targets 1.2377. Against the euro, the pound was trading flat at 87.11 pence, having hit a low of 88.14 on Monday, it’s lowest since April 22.
AUD/USD: The Australian dollar rose, extending gains for the third straight session, after data showed domestic retail sales surged in March due mostly to jump in prices. The country's retail spending jumped by a record 8.5 per cent in March as consumers stockpiled food, home and office supplies in anticipation of coronavirus lockdown measures. The Aussie trades 0.2 percent up at 0.6444, having hit a low of 0.6372 on Monday, it’s lowest since Apr. 24. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6466 (5-DMA), a break above could take it near 0.6512. On the downside, support is seen at 0.6376 (21-DMA), a break below targets 0.6357.
Equities Recap
Asian shares surged as China returned from a long holiday and on optimism over easing COVID-19 lockdowns in many countries.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3 percent.
Australia's S&P/ASX 200 index declined 0.4 percent to 5,384.60 points. South Korea's KOSPI gained 1.7 percent to 1,928.76 points.
Shanghai composite index rose 0.6 percent to 2,878.14 points, while CSI 300 index traded 0.6 percent up at 3,936.25 points.
Hong Kong’s Hang Seng traded 1.3 percent higher at 24,183.86 points. Taiwan shares added 0.05 percent to 10,774.98 points.
Commodities Recap
Crude oil prices declined, retreating from recent peaks as a higher than expected rise in U.S. inventories refocused investors on the risk of oversupply amid a coronavirus-driven slump in fuel demand. International benchmark Brent crude was trading 2.6 percent lower at $30.85 per barrel by 0605 GMT, having hit a high of $32.20 earlier, its highest since April 14. U.S. West Texas Intermediate was trading 3.3 percent down at $26.11 a barrel, after rising as high as $27.95 earlier in the session, its highest since April 9.
Gold prices dropped as the gradual easing of some coronavirus-led restrictions by several nations raised prospects of more global economic activity. Spot gold eased 0.1 percent to $1,704.90 per ounce by 0614 GMT, having touched a low of $1,670.90 on Friday, its lowest since Apr. 21. U.S. gold futures were steady at $1,710.90.
Treasuries Recap
On Tuesday, the U.S. benchmark 10-year yields rose two basis points to 0.654 percent. The yield curve between two-year and 10-year notes steepened two basis points to 47 basis points. The 30-year bond yields rose three basis points to 1.327 percent.
