Market Roundup
- Gold steadies on coronavirus fears
- Oil prices fall amid oversupply worries
- China’s producer price index rose 0.1% from a year earlier
Economic Data Ahead
- (0400 ET/0500 GMT) Italy Industrial Output s.a. (MoM) (Dec)
- (0400 ET/0500 GMT) Italy Industrial Output w.d.a. (YoY) (Dec)
- (0400 ET/0500 GMT) EZ Sentix Investor Confidence (Feb)
Key Events Ahead
- No significant events scheduled
FX Beat
DXY: The dollar index eased from a 4-month peak after the U.S. Federal Reserve said the U.S. economy slowed last year on weak global growth. The greenback against a basket of currencies traded 0.1 percent up at 98.60, having touched a high of 98.72 earlier, its highest since Oct. 11.
EUR/USD: The euro surged, halting a 5-day losing streak after three EU officials stated that Eurozone finance ministers are set to agree this month a more growth-friendly fiscal policy. On Friday, the major tumbled to a 4-month low after data showed German industrial output in December suffered its biggest fall since January 2009 stoking concerns about the economic outlook. The European currency traded 0.1 percent up at 1.0955, having touched a low of 1.0942 earlier, its lowest since October 8. Investors’ attention will remain on a series of data from the Eurozone economies and EZ Sentix investor confidence, ahead of Fed officials' speeches. Immediate resistance is located at 1.1005 (5-DMA), a break above targets 1.1020 (10-DMA). On the downside, support is seen at 1.0927, a break below could drag it below 1.0908.
USD/JPY: The dollar rose, hovering towards a 2-week peak hit in the previous session after job market data provided the latest sign of U.S. economic strength. Data released on Friday showed U.S. job growth accelerated in January, surpassing estimates, with particular strength in construction. The major was trading 0.05 percent up at 109.81, having hit a high of 110.02 on Friday, its highest since Jan. 22. Investors’ will continue to track the broad-based market sentiment, ahead of the Fed officials' speeches. Immediate resistance is located at 110.10, a break above targets 110.29. On the downside, support is seen at 109.43, a break below could take it near at 109.20 (10-DMA).
GBP/USD: Sterling consolidated near the 1.2900 handle, amid hopes that a deal will be struck before the end of the year to avoid a potentially disruptive break in trading relations. The major traded 0.2 percent higher at 1.2903, having hit a low of 1.2881 on Friday, it’s lowest since Nov. 29. Investors’ attention will remain on the trade negotiations, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2965 (5-DMA), a break above could take it near 1.3013. On the downside, support is seen at 1.2876, a break below targets 1.2834. Against the euro, the pound was trading 0.1 percent up at 84.88 pence, having hit a low of 85.37 on Tuesday, it’s lowest since Jan. 20.
AUD/USD: The Australian dollar rallied above the 0.6700 handle, amid some early signs that the spread of the coronavirus epidemic could be slowing down. The major was also supported by data showing China’s producer price index rose 0.1 percent in January from a year earlier, in line with expectations and reversing a 0.5 percent drop in December. The Aussie trades 0.5 percent up at 0.6705, having hit a low of 0.6664 on Friday, it’s lowest since March 2009. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6650, a break below targets 0.6615. On the upside, resistance is located at 0.6726 (10-DMA), a break above could take it near 0.6774.
NZD/USD: The New Zealand dollar rebounded from an over 2-month low ahead of Reserve Bank of New Zealand’s monetary policy decision on Wednesday, where it is expected to hold rates at record lows of 1.0 percent. The Kiwi trades 0.2 percent up at 0.6411, having touched a low of 0.6394 earlier, its lowest level since November 25. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6456 (5-DMA), a break above could take it near 0.6503. On the downside, support is seen at 0.6381, a break below could drag it below 0.6360.
Equities Recap
Asian shares tumbled as the death toll from a coronavirus outbreak surpassed the SARS epidemic, raising fears about its severity.
MSCI's broadest index of Asia-Pacific shares outside Japan plunged 0.7 percent.
Tokyo's Nikkei fell 0.6 percent to 23,685.98 points, Australia's S&P/ASX 200 index declined 0.1 percent to 7,012.50 points and South Korea's KOSPI eased 0.5 percent to 2,200.73 points.
Shanghai composite index rose 0.4 percent to 2,887.09 points, while CSI 300 index traded 0.3 percent up at 3,911.53 points.
Hong Kong’s Hang Seng traded 0.6 percent lower at 27,241.12 points. Taiwan shares shed 0.3 percent to 11,574.07 points
Commodities Recap
Crude oil prices declined, extending losses for the third straight session as the spectre of excess supplies loomed over the market after the spreading coronavirus outbreak hit demand in China. International benchmark Brent crude was trading 0.3 percent lower at $54.35 per barrel by 0503 GMT, having hit a low of $53.89 earlier, its lowest since Feb. 05. U.S. West Texas Intermediate was trading 0.3 percent down at $50.25 a barrel, after falling as low as $49.60 earlier, its lowest since Feb. 5.
Gold prices surged to a near 1-week peak amid rising concerns over the severity of the coronavirus outbreak and its impact on the global markets. Spot gold was trading 0.1 percent up at $1,571.92 per ounce by 0513 GMT, having touched a low of $1547.55 on Wednesday, its lowest since Jan. 15. U.S. gold futures were flat at $1,572.70.
Treasuries Recap
The Australian bonds jumped during the Asian session of the first trading day of the week as investors continued to crowd into safe-haven assets amid a continued increase in China’s death tolls emerging from Coronavirus. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slumped nearly 3-1/2 basis points to 1.033 percent, the yield on the long-term 30-year bond also plunged 3-1/2 basis points to 1.623 percent and the yield on short-term 2-year lost nearly 2-1/2 basis points to trade at 0.734 percent.
