Market Roundup
- Oil prices head for weekly gain
- Gold set for first weekly decline in 10
- RBA's Lowe: No concerns at all about Australian banks stability
- China’s retail sales fall in July
Economic Data Ahead
- (0500 ET/0900 GMT) EZ Employment Change (YoY)(Q2) PREL
- (0500 ET/0900 GMT) EZ Trade Balance n.s.a.(Jun)
- (0500 ET/0900 GMT) EZ Gross Domestic Product s.a. (QoQ)(Q2) PREL
- (0500 ET/0900 GMT) EZ Gross Domestic Product s.a. (YoY)(Q2) PREL
- (0500 ET/0900 GMT) EZ Trade Balance s.a.(Jun)
- (0500 ET/0900 GMT) EZ Employment Change (QoQ)(Q2) PREL
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index rose following a rise in U.S. Treasury yields. The benchmark U.S. 10-year yields are up nearly 15 basis points this week in the sharpest jump since early June, as the U.S. Treasury flooded the market with supply. The greenback against a basket of currencies traded 0.05 percent up at 93.27, having touched a high of 93.91 on Wednesday, its highest since August 3.
EUR/USD: The euro rose, extending gains for the fourth straight session, as investors awaited the release of preliminary European employment and GDP numbers due later in the day. The European currency traded 0.05 percent higher at 1.1817, having touched a low of 1.1864 on Thursday, its lowest since August 3. Investors’ attention will remain on a series of data from Eurozone economies, EZ employment change, trade balance and gross domestic product, ahead of the U.S. retail sales, nonfarm productivity, unit labour cost, industrial production, capacity utilization, business inventories and Michigan consumer sentiment index. Immediate resistance is located at 1.1848, a break above targets 1.1883. On the downside, support is seen at 1.1760 (5-DMA), a break below could drag it below 1.1711.
USD/JPY: The dollar declined, halting a 5-day winning streak as investor sentiment weakened after China’s retail sales unexpectedly extended their fall into a seventh month in July and industrial output missed expectations, suggesting domestic demand is still struggling after the coronavirus outbreak. Markets kept a wary eye on a stalemate in Washington over a new stimulus package, with key U.S.-China trade talks on Aug. 15 also eyed. The major was trading 0.1 percent down at 106.85, having hit a high of 107.05 in the previous session, its highest since July 23. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. retail sales, nonfarm productivity, unit labour cost, industrial production, capacity utilization, business inventories and Michigan consumer sentiment index. Immediate resistance is located at 107.22 a break above targets 107.54. On the downside, support is seen at 106.43 (5-DMA), a break below could take it near at 106.15 (21-DMA).
GBP/USD: Sterling consolidated within narrow ranges as investors digested this week’s downbeat data showing the British economy was among the worst-performing nations in the second quarter with analysts expecting some recovery in the coming months. The major traded flat at 1.3061, having hit a low of 1.3005 on Wednesday, it’s lowest since August 4. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3110, a break above could take it near 1.3147. On the downside, support is seen at 1.3004, a break below targets 1.2977. Against the euro, the pound was trading flat at 90.43 pence, having hit a high of 89.69 on Tuesday, it’s highest since July 13.
AUD/USD: The Australian dollar nudged higher, after Reserve Bank of Australia Governor Philip Lowe said that policymakers had no concerns about the stability of the country’s banking system as unemployment rose and millions of dollars in loans deferred. The Aussie trades 0.1 percent higher at 0.7155, having hit a low of 0.7109 on Wednesday, it’s lowest since August 4. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7197 a break above could take it near 0.7240. On the downside, support is seen at 0.7123, a break below targets 0.7090.
Equities Recap
Asian shares gained as investors await progress in negotiations over U.S. economic stimulus.
MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.1 percent.
Tokyo's Nikkei rose 0.2 percent to 23,289.36 points, Australia's S&P/ASX 200 index rallied 0.6 percent to 6,126.20 points. South Korea's KOSPI eased 1.2 percent to 2,407.49 points.
Shanghai composite index rose 1.2 percent to 3,360.10 points, while CSI 300 index traded 1.5 percent up at 4,704.63 points.
Hong Kong’s Hang Seng traded 0.05 percent lower at 25,216.43 points. Taiwan shares added 0.3 percent to 12,795.46 points.
Commodities Recap
Crude oil prices surged and were heading for a second week of gains amid growing confidence that demand for fuel is starting to pick up despite the coronavirus pandemic that has slammed economies worldwide. International benchmark Brent crude was trading 0.2 percent up at $45.10 per barrel by 0603 GMT, having hit a high of $45.76 on Tuesday, its highest since August 5. U.S. West Texas Intermediate was trading 0.1 percent higher at $42.37 a barrel, after rising as high as $42.92 on Tuesday, its highest since August 5.
Gold prices edged lower as a rise in U.S. Treasury yields forced investors to reassess their positions again after a steep retreat from a record peak earlier this week, putting the safe-haven metal on course for its first weekly fall since early June. Spot gold was trading 0.2 percent down at $1,949.70 an ounce by 0607 GMT, having hit a low of $1862.89 on Wednesday, its lowest since July 22. Bullion declined 4 percent so far this week, its biggest weekly percentage fall since early March. U.S. gold futures fell 0.5 percent to $1,960.50.
Treasuries Recap
The U.S. Treasury yields declined, with the benchmark 10-year note yield trading at 0.705 percent.
