Market Roundup
- Oil prices fall further on U.S. crude stock build
- Gold eases off multi-year peak
Economic Data Ahead
- (0400 ET/0800 GMT) Italy Trade Balance non-EU(May)
- (0600 ET/1000 GMT) UK CBI Distributive Trades Survey - Realized (MoM)(Jun)
Key Events Ahead
- (0430 ET/0830 GMT) UK FPC Statement
- (0730 ET/1130 GMT) ECB Monetary Policy Meeting Accounts
FX Beat
DXY: The dollar index nudged higher as a rise in coronavirus cases in the United States weighed on optimism about a quick economic recovery. The greenback against a basket of currencies traded 0.05 percent up at 97.27, having touched a high of 97.74 on Monday, its highest since June 2.
EUR/USD: The euro eased, extending previous session losses as the U.S. weighed tariffs on European products. The bid tone around the major further weakened after European Central Bank chief economist Philip Lane stated that the eurozone economy will need a long time to recover from its pandemic-induced crisis. The European currency traded 0.05 percent down at 1.1245, having touched a low of 1.1168 on Friday, its lowest since June 3. Investors’ attention will remain on a series of data from Eurozone economies and ECB monetary policy meeting accounts, ECB Schnabel and Mersch's speech, ahead of U.S. unemployment benefit claims, durable goods, wholesale inventories, personal consumption expenditures, goods trade balance, gross domestic product, Kansas Fed manufacturing Activity and Fed Kaplan's speech. Immediate resistance is located at 1.1293, a break above targets 1.1340. On the downside, support is seen at 1.1212, a break below could drag it below 1.1168.
USD/JPY: The dollar rallied to a 1-week peak, as some investors expect the economic impact from second wave infections could be smaller than the first one. The major was trading 0.1 percent up at 107.16, having hit a low of 106.07 on Tuesday, its lowest since May 7. Investors’ will continue to track the broad-based market sentiment, ahead of U.S. unemployment benefit claims, durable goods, wholesale inventories, personal consumption expenditures, goods trade balance, gross domestic product, Kansas Fed manufacturing Activity and Fed Kaplan's speech. Immediate resistance is located at 107.44, a break above targets 107.64. On the downside, support is seen at 106.73, a break below could take it near at 106.57.
GBP/USD: Sterling declined as fears of a second wave of coronavirus infections and news the United States is reviewing tariffs on European products dented global risk appetite. Moreover, concerns whether Britain can get a deal on its future relationship with the European Union also weighed on the British pound. The major traded 0.05 percent down at 1.2419, having hit a low of 1.2335 on Monday, it’s lowest since June 1. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2467, a break above could take it near 1.2525 (21-DMA). On the downside, support is seen at 1.2377, a break below targets 1.2354. Against the euro, the pound was trading 0.05 percent down at 90.60 pence, having hit a low of 90.78 on Tuesday, it’s lowest since March 27.
AUD/USD: The Australian dollar slumped as risk sentiment weakened on news that the United States is weighing its tariffs on European products and is considering changing rates for various products as part of the trading partners' aircraft dispute. The Aussie trades 0.05 percent down at 0.6860, having hit a high of 0.6974 on Tuesday, it’s highest since June 16. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6925, a break above could take it near 0.6960. On the downside, support is seen at 0.6828 a break below targets 0.6807.
Equities Recap
Asian shares tumbled as surging U.S. coronavirus cases, global trade tensions and an International Monetary Fund downgrade to economic projections dented confidence in a recovery.
MSCI's broadest index of Asia-Pacific shares outside Japan slumped 0.7 percent.
Tokyo's Nikkei fell 1.1 percent to 22,279.92 points, Australia's S&P/ASX 200 index plunged 2.1 percent to 5,838.80 points. South Korea's KOSPI declined 1.9 percent to 2,119.71 points.
Markets in Hong Kong, Taiwan and mainland China are closed for public holidays.
Commodities Recap
Crude oil prices declined, extending losses from the previous session, weighed down by record high U.S. crude inventories and worries that a rapid resurgence in COVID-19 cases could block a revival in fuel demand. International benchmark Brent crude was trading 1.02 percent lower at $40.33 per barrel by 0456 GMT, having hit a low of $39.60 on Wednesday, its lowest since June 16. U.S. West Texas Intermediate was trading 0.9 percent down at $37.71 a barrel, after falling as low as $37.33 on Wednesday, its lowest since June 13.
Gold prices steadied after tumbling from a near 8-year high recorded in the last session, as a selloff in equity markets driven by a surge in coronavirus cases prompted some investors to dump riskier assets. Spot gold was trading 0.05 percent up at $1,762.54 per ounce by 0502 GMT, having touched a high of $1,779.44 on Wednesday, its highest since October 2012. U.S. gold futures fell 0.2 percent to $1,771.80.
Treasuries Recap
The U.S. Treasury yields edged down, with the benchmark 10-year note yield trading at 0.675 percent, while the 2-year yield was at 0.191 percent.
