Market Roundup
- Oil rises on smaller-than-expected rise in crude stocks
- Gold gains on virus risks
- Australia's Treasury predicts lower Q1 GDP
Economic Data Ahead
- No Major Economic Data
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index nudged lower, as an emergency 50 basis point interest rate cut by the Fed on Tuesday continued to weigh on investor sentiment. The greenback against a basket of currencies traded 0.05 percent down at 97.33, having touched a low of 96.98 on Tuesday, its lowest since Jan. 8.
EUR/USD: The euro consolidated within narrow ranges after the European Commission in a preliminary assessment stated that Eurozone growth is likely to be slower in 2020 than the 1.2 percent forecast only in mid-February because of the negative effects of the coronavirus. The European currency traded flat at 1.1135, having touched a high of 1.1213 on Tuesday, its highest since Jan. 2. Investors’ attention will remain on the U.S. unemployment benefit claims, factory orders, and Fed Kaplan's speech, amid a lack of data from the Eurozone docket. Immediate resistance is located at 1.1185, a break above targets 1.1215. On the downside, support is seen at 1.1093 (5-DMA), a break below could drag it below 1.1053.
USD/JPY: The dollar eased, reversing some of its previous session gains after a Fed report showed there are signs the epidemic has begun to weigh on business sentiment in the United States. On Wednesday, the pair rebounded from a near 5-month low, as robust jobs data and the resurgence of moderate Joe Biden in the Democratic Party primaries lifted investors’ risk appetite. The major was trading 0.1 percent down at 107.43, having hit a low of 106.84 the day before, its lowest since October 8. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims, factory orders, and Fed Kaplan's speech. Immediate resistance is located at 107.91, a break above targets 108.20. On the downside, support is seen at 107.09, a break below could take it near at 106.63.
GBP/USD: Sterling rallied to a near 1-week peak after incoming Bank of England Governor Andrew Bailey said any BoE measures would be best done in tandem with Britain’s government, curbing expectations of any emergency rate cut. The major traded higher at 1.2875, having hit a high of 1.2879 earlier, it’s highest since Feb. 28. Investors’ attention will remain on the trade negotiations, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2907, a break above could take it near 1.2925 (21-DMA). On the downside, support is seen at 1.2848, a break below targets 1.2827 (5-DMA). Against the euro, the pound was trading flat at 86.47 pence, having hit a low of 87.44 on Wednesday, it’s lowest since Oct. 15.
AUD/USD: The Australian dollar held firm near a 2-week peak after Australia’s Treasury Department stated that it is not forecasting a recession as yet, but that the coronavirus is expected to erase half a percentage point from first-quarter growth. The Aussie trades flat at 0.6627, having hit a low of 0.6433 on Friday, it’s lowest since March 2009. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6648 (21-DMA), a break above could take it near 0.6665. On the downside, support is seen at 0.6581 (10-DMA), a break below targets 0.6564 (5-DMA).
NZD/USD: The New Zealand dollar advanced, extending gains for the fourth straight session as investors continued to make adjustments to the Federal Reserve’s surprise 50 basis point rate cut. The Kiwi trades 0.2 percent up at 0.6308, having touched a low of 0.6191 on Friday, its lowest level since August 2015. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6338 (50% retracement of 0.6487 and 0.6191), a break above could take it near 0.6373 (61.8% retracement). On the downside, support is seen at 0.6277 (5-DMA), a break below could drag it below 0.6259.
Equities Recap
Asian shares gained for a fourth straight session after the Federal Reserve and Bank of Canada both responded by cutting interest rates by 50 basis points.
MSCI's broadest index of Asia-Pacific shares outside Japan rallied 0.7 percent.
Tokyo's Nikkei surged 1.1 percent to 21,329.12 points, Australia's S&P/ASX 200 index gained 1.1 percent to 6,395.70 points and South Korea's KOSPI surged 1.2 percent to 2,082.46 points.
Shanghai composite index rose 2.1 percent to 3,072.91 points, while CSI 300 index traded 2.4 percent up at 4,212.52 points.
Hong Kong’s Hang Seng traded 2.1 percent higher at 26,772.39 points. Taiwan shares added 1.1 percent to 11,514.82 points
Commodities Recap
Crude oil prices surged, halting a 2-day losing streak, after industry data showed a smaller-than-expected rise in crude oil inventories in the United States, although uncertainties over cuts by major oil producers capped gains. International benchmark Brent crude was trading 0.6 percent higher at $51.86 per barrel by 0529 GMT, having hit a low of $48.92 on Friday, its lowest since July 2017. U.S. West Texas Intermediate was trading 0.5 percent up at $47.40 a barrel, after falling as low as $43.88 on Friday, its lowest since Dec. 2018.
Gold prices rose, fuelled by worries about the fast-spreading coronavirus, although a rise in equity markets limited the safe-haven's gains. Spot gold surged 0.1 percent to $1,638.84 per ounce by 0535 GMT, having touched a low of $1563.03 on Friday, its lowest since Feb. 12. U.S. gold futures were up 0.2 percent to $1,640.10.
Treasuries Recap
The benchmark U.S. 10-year yields were just a tad above 1 percent.
The Japanese government bond futures narrowed losses, with the benchmark 10-year JGB futures falling 0.06 point to 154.09. The 10-year JGB yield rose 1.5 basis points to minus 0.130 percent. The 20-year JGB yield rose 2.5 basis points to 0.200 percent. The 30-year JGB yield rose 2.5 basis points to 0.335 percent, while the 40-year JGB yield rose 2.5 basis points to 0.350 percent. The five-year yield rose 1.5 basis points to minus 0.255 percent. At the short end of the curve, the two-year JGB yield rose 1.5 basis points to minus 0.265 percent.
