Market Roundup
- Oil surges amid hopes for truce in Saudi-Russia price war
- Dollar steadies as investors seek safety in liquidity
Economic Data Ahead
- (0500 ET/0900 GMT) EZ Producer Price Index (YoY) (Feb)
- (0500 ET/0900 GMT) EZ Producer Price Index (MoM) (Feb)
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index nudged up after data showed that U.S. manufacturing activity contracted less than expected in March. Investors now await initial claims for jobless benefits today and U.S. non-farm payroll data due on Friday for further clues about the impact of the coronavirus outbreak. The greenback against a basket of currencies traded 0.05 percent up at 99.51, having touched a low of 98.27 on Friday, its lowest since Mar. 17.
EUR/USD: The euro eased, extending losses for the fourth straight session, weighed down by data that showed Eurozone manufacturing activity collapsed in March as breaks in global supply chains caused by measures to curb the coronavirus pandemic crushed output. Eurozone IHS Markit’s final March manufacturing Purchasing Managers’ Index plunged to 44.5, below a flash reading of 44.8 and February’s 49.2, its lowest since mid-2012. The European currency traded 0.2 percent down at 1.0944, having touched a high of 1.1147 on Friday, its highest since March 17. Investors’ attention will remain on a series of data from the Eurozone economies, EZ producer price index, ahead of the U.S. trade balance, unemployment benefit claims and factory orders. Immediate resistance is located at 1.1039 (5-DMA), a break above targets 1.1065 (50% retracement of 1.1495 and 1.0635). On the downside, support is seen at 1.0897 (10-DMA), a break below could drag it below 1.0838.
USD/JPY: The dollar rebounded from a 2-week low after U.S. data released yesterday showed private-sector jobs lost for the month of March were much lower than expected. The ADP National Employment Report showed private payrolls fell by 27,000 jobs last month, the first decline since September 2017, compared with forecasts of 150,000 job losses. The major was trading 0.1 percent up at 107.27, having hit a low of 106.92 on Wednesday, its lowest since Mar. 18. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. trade balance, unemployment benefit claims and factory orders. Immediate resistance is located at 108.04, a break above targets 108.30. On the downside, support is seen at 106.75, a break below could take it near at 106.45.
GBP/USD: Sterling consolidated within narrow ranges, amid a wider selloff in global stock markets as data showed factory activity across the world contracting sharply due to the coronavirus pandemic. The major traded 0.5 percent higher at 1.2430, having hit a high of 1.2485 on Friday, it’s highest since March 13. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2516 (61.8% retracement of 1.3200 and 1.1406), a break above could take it near 1.2600. On the downside, support is seen at 1.2305, a break below targets 1.2270. Against the euro, the pound was trading 0.5 percent up at 88.15 pence, having hit a high of 87.85 on Wednesday, it’s highest since Mar. 12.
AUD/USD: The Australian dollar rose, halting a 2-day losing streak, despite Reserve Bank of Australia ruling out the possibility of negative interest rates. Investors seem to have ignored Australia’s Q1 NAB Business Confidence and Business Conditions disappointing numbers that dropped to -11 from -2 prior and slumped from 8 previous to -4, respectively. The Aussie trades 0.5 percent up at 0.6101, having hit a high of 0.6213 on Tuesday, it’s highest since Mar. 16. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6234 (61.8% retracement of 0.6684 and 0.5506), a break above could take it near 0.6302. On the downside, support is seen at 0.5989 (10-DMA), a break below targets 0.5956.
Equities Recap
Asian shares tumbled after a warning about the U.S. coronavirus death toll and growing evidence of a deep economic downturn.
MSCI's broadest index of Asia-Pacific shares outside Japan declined 0.6 percent.
Tokyo's Nikkei plunged 1.4 percent to 17,818.72 points, Australia's S&P/ASX 200 index eased 1.9 percent to 5,154.30 points and South Korea's KOSPI rose 2.3 percent to 1,724.86 points.
Shanghai composite index rose 1.7 percent to 2,780.64 points, while CSI 300 index traded 1.6 percent up at 3,734.53 points. Hong Kong’s Hang Seng traded 0.5 percent higher at 23,204.69 points.
Commodities Recap
Crude oil prices surged after U.S. President Donald Trump said he expected Saudi Arabia and Russia to reach a deal in the next few days to end their oil price war. International benchmark Brent crude was trading 3.7 percent higher at $26.60 per barrel by 0532 GMT, having hit a low of $21.64 on Monday, its lowest since March 2002. U.S. West Texas Intermediate was trading 2.2 percent up at $21.43 a barrel, after falling as low as $19.29 on Monday, its lowest since Feb. 2002.
Gold prices declined as the dollar held firm, while investors awaited key U.S. jobless data amid mounting signs of a recession due to the worsening coronavirus outbreak. Spot gold fell 0.3 percent to $1,587.42 per ounce by 0535 GMT, having touched a high of $1644.43 last week, its highest since Mar. 12. U.S. gold futures rose 0.4 percent to $1,597.20 per ounce.
Treasuries Recap
The yields on most Japanese government bonds fell, with the benchmark 10-year JGB yield falling 1.5 basis points to minus 0.015 percent. Futures for 10-year JGBs rose 0.02 point to 152.74. The 20-year JGB yield rose 0.5 basis point to 0.295 percent. At the long end of the yield curve, the 30-year JGB yield fell 1.5 basis points to 0.395 percent. The five-year yield fell 0.5 basis point to minus 0.130 percent. At the short end of the yield curve, the two-year JGB yield was flat at minus 0.140 percent.
