Market Roundup
- Oil hits three-month high on hopes for output cuts
- Gold prices ease as equity rally
- China's services sector bounces back into growth: Caixin PMI
Economic Data Ahead
- (0315 ET/0715 GMT) Spain Markit Services PMI(May)
- (0345 ET/0745 GMT) Italy Markit Services PMI(May)
- (0350 ET/0750 GMT) France Markit Services PMI(May)
- (0350 ET/0750 GMT) France Markit PMI Composite(May)
- (0355 ET/0755 GMT) Germany Unemployment Rate s.a.(May)
- (0355 ET/0755 GMT) Germany Unemployment Change(Jun)
- (0355 ET/0755 GMT) Germany Markit Services PMI(May)
- (0355 ET/0755 GMT) Germany Markit PMI Composite(May)
- (0400 ET/0800 GMT) Italy Unemployment(Apr)
- (0400 ET/0800 GMT) EZ Markit Services PMI(May)
- (0400 ET/0800 GMT) EZ Markit PMI Composite(May)
- (0430 ET/0830 GMT) UK Markit Services PMI(May)
- (0500 ET/0900 GMT) EZ Producer Price Index (YoY)(Apr)
- (0500 ET/0900 GMT) EZ Producer Price Index (MoM)(Apr)
- (0500 ET/0900 GMT) EZ Unemployment Rate(Apr)
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index slumped to a fresh 2-1/2 month low as demonstrations against police brutality continued in the United States, in spite of curfews. The greenback against a basket of currencies traded 0.3 percent down at 97.41, having touched a low of 97.37 earlier, its lowest since March 13.
EUR/USD: The euro rallied to a 2-1/2 week peak, as the European Central Bank is expected to increase its 750 billion-euro bond-buying programme, Pandemic Emergency Purchase Programme, on Thursday. The European currency traded 0.3 percent up at 1.1206, having touched a high of 1.1212 on Tuesday, its highest since March 16. Investors’ attention will remain on a series of data from Eurozone economies EZ service PMI and producer price index, ahead of the U.S. ADP employment change and non-manufacturing PMI by both Markit and ISM. Immediate resistance is located at 1.1236, a break above targets 1.1285. On the downside, support is seen at 1.1137, a break below could drag it below 1.1096 (5-DMA).
USD/JPY: The dollar declined from a near 2-month peak as investors pondered mass protests against racism spreading across the United States. However, prospects of more government stimulus and a global economic recovery limited downside. The major was trading 0.1 percent down at 108.53, having hit a high of 108.84 earlier, its highest since April 9. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. ADP employment change and non-manufacturing PMI by both Markit and ISM. Immediate resistance is located at 109.06, a break above targets 109.27. On the downside, support is seen at 108.32, a break below could take it near at 108.07.
GBP/USD: Sterling advanced to a 1-month high above the 1.2600 handle on signs that Britain might be willing to compromise on sticking points in Brexit negotiations with the European Union. The major traded 0.3 percent up at 1.2584, having hit a high of 1.2611 earlier, it’s highest since April 30. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2643, a break above could take it near 1.2706. On the downside, support is seen at 1.2482, a break below targets 1.2437. Against the euro, the pound was trading 0.05 percent down at 89.00 pence, having hit a low of 90.54 on Friday, it’s lowest since March 27.
AUD/USD: The Australian dollar rallied to a 5-month peak after a private survey showed the services sector in the Chinese economy returned to growth, which could bolster expectations for economic recovery. China’s Caixin/Markit services Purchasing Managers’ Index rose to 55.0 in May from 44.4 in April, hitting the highest level since late 2010. The Aussie trades 0.5 percent up at 0.6931, having hit a high of 0.6982 earlier, it’s highest since Jan 3. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7004, a break above could take it near 0.7031. On the downside, support is seen at 0.6859, a break below targets 0.6838.
Equities Recap
Asian shares steadied near a 3-month high amid hopes of more stimulus and further easing in social restrictions around the world.
MSCI's broadest index of Asia-Pacific shares outside Japan surged 1.3 percent.
Tokyo's Nikkei rallied 1.1 percent to 22,573.26 points, Australia's S&P/ASX 200 index surged 1.8 percent to 5,937.50 points. South Korea's KOSPI jumped 3.05 percent to 2,150.31 points.
Shanghai composite index rose 0.5 percent to 2,934.88 points, while CSI 300 index traded 0.4 percent up at 3,999.54 points.
Hong Kong’s Hang Seng traded 1.3 percent higher at 24,302.00 points. Taiwan shares shed 1.7 percent to 11,320.16 points.
Commodities Recap
Crude oil prices rallied to a near 3-month high amid optimism that major producers will extend production cuts as the world recovers from the coronavirus pandemic. International benchmark Brent crude was trading 1.3 percent higher at $40.11 per barrel by 0508 GMT, having hit a high of $40.41 earlier, its highest since March 9. U.S. West Texas Intermediate was trading 2.3 percent up at $37.67 a barrel, after rising as high as $37.86 earlier, its highest since March 9.
Gold prices declined as equity markets rallied on hopes of more stimulus and further easing in social restrictions. Spot gold was trading 0.1 percent down at $1,726.17 per ounce by 0517 GMT, having touched a high of $1,745.30 on Tuesday, its highest since May 21. U.S. gold futures fell 0.1 percent to $1,732.20.
Treasuries Recap
On Tuesday, the two-year U.S. Treasury yield was up 1 basis point at 0.1682 percent, while the part of the yield curve measuring the gap between yields on 5- and 30-year Treasuries was at 116 basis points, its highest since early 2017. The benchmark 10-year yield was up 1.8 basis point at 0.6803 percent.
