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Asia Roundup: Kiwi rallies to 19-month peak as investors await RBNZ policy meeting, dollar steadies against yen as risk sentiment improves, investors eye BoE Bailey's speech - Monday, November 9th, 2020

Market Roundup

  • Oil gains after Biden clinches U.S. presidency
     
  • Dollar nurses losses as risk assets gain
     
  • Gold prices firm after Biden win
     

Economic Data Ahead

  • (0430 ET/0930 GMT) EZ Sentix Investor Confidence(Nov)

Key Events Ahead

  • No Significant Events Scheduled

FX Beat

DXY: The dollar index slumped to a 2-month low as a potentially divided U.S. government with Republicans in control of the Senate may mean a smaller fiscal stimulus package, which could put the spotlight on the Federal Reserve to do more to revive the economy. The greenback against a basket of currencies traded 0.05 percent down at 92.20, having touched a low of 92.13 earlier, its lowest since September 1.

EUR/USD: The euro surged to an over 1-1/2 month peak, as the dollar weakened on expectations that a calmer White House could boost world commerce and that monetary policy will remain easy. The European currency traded 0.2 percent higher at 1.1894, having touched a high of 1.1895 earlier, its highest since September 15. Investors’ attention will remain on a series of economic data from the Eurozone economies, and EZ Sentix Investor Confidence, amid a lack of data economic data from the U.S. docket. Immediate resistance is located at 1.1920, a break above targets 1.1950. On the downside, support is seen at 1.1852, a break below could drag it below 1.1830.

USD/JPY: The dollar steadied near an 8-month low as expectations of fewer regulatory reforms and more monetary stimulus under U.S. President-elect Joe Biden supported risk appetite. Although, Republicans appear to have retained control of the Senate, though the final makeup may not be clear until runoff votes in Georgia in January. The major was trading 0.1 percent up at 103.46, having hit a low of 103.17 on Friday, its lowest since March 12. Investors’ will continue to track the broad-based market sentiment, as U.S. economic calendar remains absolutely data empty. Immediate resistance is located at 103.83, a break above targets 104.15. On the downside, support is seen at 103.02, a break below could take it near at 102.85

GBP/USD: Sterling rallied to a 2-month peak as the dollar eased after Biden clinched U.S. presidency. Investors now await Bank of England Governor Andrew Bailey and chief economist Andy Haldane's speeches due later in the day, where talk of negative rates is in focus. Significant differences remain in talks over a trade deal between Britain and the European Union, as they promised to step up efforts to find an agreement. The major traded 0.3 percent higher at 1.3184, having hit a high of 1.3193 earlier, it’s highest since September 7. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3220, a break above could take it near 1.3250. On the downside, support is seen at 1.3122, a break below targets 1.3101. Against the euro, the pound was trading 0.1 percent up at 90.20 pence, having hit a high of 89.45 on Wednesday, it’s highest since September 7.

AUD/USD: The Australian dollar rallied to multi-week peaks, as the greenback eased across the board. The Aussie trades 0.6 percent up at 0.7297, having hit a high of 0.7300 earlier, it’s highest since September 21. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7324, a break above could take it near 0.7345. On the downside, support is seen at 0.7243, a break below targets 0.7210.

NZD/USD: The New Zealand dollar hit a 19-month high as the investors awaited the Reserve Bank of New Zealand meeting on Wednesday, with expectations it will hold rates but lay the framework for going negative next year.  The Kiwi traded 0.4 percent higher at 0.6781, having touched a high of 0.6788 earlier, its highest level since September 18. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6823, a break above could take it near 0.6848. On the downside, support is seen at 0.6763 (23.6% retracement), a break below could drag it below 0.6738.

Equities Recap

Asian shares rallied as investors cheered Biden’s victory, shrugging off worries about rising global coronavirus cases.

MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 1.4 percent.

Tokyo's Nikkei surged 2.1 percent to 24,839.84 points, Australia's S&P/ASX 200 index rallied 1.8 percent to 6,298.80 points. South Korea's KOSPI gained 1.2 percent to 2,446.05 points.

Shanghai composite index rose 1.6 percent to 3,365.57 points, while CSI 300 index traded 1.7 percent up at 4,967.35 points.

Hong Kong’s Hang Seng traded 1.2 percent higher at 26,012.87 points. Taiwan shares added 1.2 percent to 13,127.47 points.

Commodities Recap

Crude oil prices surged more than 2 percent after Joe Biden clinched the U.S. presidency and buoyed risk appetite, offsetting worries about impact on fuel demand from the worsening coronavirus pandemic. International benchmark Brent crude was trading 1.8 percent up at $40.36 per barrel by 0517 GMT, having hit a high of $41.50 on Thursday, its highest since October 26. U.S. West Texas Intermediate was trading 1.8 percent higher at $38.05 a barrel, after rising as high as $39.34 on Thursday, its highest since October 27.

Gold prices surged to an over 1-1/2 month peak, boosted by a weaker dollar and hopes of more stimulus measures under U.S. President-elect Joe Biden. Spot gold rose 0.5 percent to $1,962.14 per ounce by 0522 GMT, having hit a high of $1964.73 earlier, its highest since September 16. U.S. gold futures rose 0.2 percent to $1,955.60 per ounce.

Treasuries Recap

The U.S. Treasury yields eased, with the benchmark 10-year note yield trading at 0.815 percent and the 30-year yield at 1.593 percent.

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