Market Roundup
- Oil falls as rise in U.S. inventory revive oversupply concerns
- Gold gains ahead of Fed policy decision
Economic Data
- (0245 ET/0645 GMT) France Industrial Output (MoM)(Apr)
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index slumped to a near 3-month low as investors adopted a cautious stance and await the Federal Reserve’s monetary policy statement due later in the day, followed by a press conference from Chairman Jerome Powell. The greenback against a basket of currencies traded 0.3 percent down at 96.13, having touched a low of 96.11 earlier, its lowest since March 12.
EUR/USD: The euro surged, hovering towards a 3-month peak, as the dollar plunged to multi-month lows against a basket of currencies. The European currency traded 0.2 percent up at 1.1360, having touched a high of 1.1383 on Friday, its highest since March 10. Investors’ attention will remain on a series of data from Eurozone economies and ECB De Guindos speech, ahead of U.S. consumer price index, monthly budget statement, FOMC economic projections, Fed interest rate decision, Fed monetary policy statement, and FOMC press conference. Immediate resistance is located at 1.1390, a break above targets 1.1415. On the downside, support is seen at 1.1319, a break below could drag it below 1.1298 (5-DMA).
USD/JPY: The dollar slumped to a 1-1/2 week low amid some speculation the U.S. Federal Reserve could take steps to curb a recent rise in bond yields at its policy meeting. The U.S. central bankers will also publish later in the day their first economic projections since the coronavirus pandemic set off a recession in February. The major was trading 0.2 percent down at 107.46, having hit a low of 107.45 earlier, its lowest since June 1. Investors’ will continue to track the broad-based market sentiment, ahead of U.S. consumer price index, monthly budget statement, FOMC economic projections, Fed interest rate decision, Fed monetary policy statement, and FOMC press conference. Immediate resistance is located at 108.10, a break above targets 108.30 (10-DMA). On the downside, support is seen at 107.26, a break below could take it near at 107.07.
GBP/USD: Sterling rallied to a near 3-month high as investors await the EU’s chief Brexit negotiator Michel Barnier's speech later in the day, which may yield details that will help determine whether market sentiment will improve. However, concerns about progress in trade talks between Britain and the European Union limited the British pound's upside. The major traded 0.3 percent up at 1.2771, having hit a high of 1.2778 earlier, it’s highest since March 12. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2820, a break above could take it near 1.2848. On the downside, support is seen at 1.2672, a break below targets 1.2656(5-DMA). Against the euro, the pound was trading 0.1 percent up at 89.00 pence, having hit a high of 88.64 on Tuesday, it’s highest since June 2.
AUD/USD: The Australian dollar rose, reversing some of its previous session losses, amid hopes for economic recovery. On Tuesday, the major eased from an 11-month peak amid growing worries about a deterioration in diplomatic relations between Australia and China. The Aussie trades 0.5 percent up at 0.6997, having hit a high of 0.7042 earlier, it’s highest since July 22. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7030, a break above could take it near 0.7075. On the downside, support is seen at 0.6898, a break below targets 0.6842 (10-DMA).
Equities Recap
Asian shares surged as optimism in financial markets supported economic recovery hopes.
MSCI's broadest index of Asia-Pacific shares outside Japan surged 0.3 percent.
Tokyo's Nikkei rose 0.1 percent to 23,124.22 points, Australia's S&P/ASX 200 index surged 0.05 percent to 6,148.40 points. South Korea's KOSPI rallied 0.2 percent to 2,193.79 points.
Shanghai composite index eased 0.5 percent to 2,940.40 points, while CSI 300 index traded 0.3 percent down at 4,035.32 points.
Hong Kong’s Hang Seng traded 0.1 percent higher at 25,082.58 points. Taiwan shares added 0.7 percent to 11,720.16 points.
Commodities Recap
Crude oil prices declined after data showed a rise in crude and fuel stockpiles in the United States, reviving concerns about oversupply. International benchmark Brent crude was trading 0.1 percent lower at $40.61 per barrel by 0513 GMT, having hit a high of $43.29 on Monday, its highest since March 9. U.S. West Texas Intermediate was trading 0.3 percent down at $38.28 a barrel, after rising as high as $40.42 on Monday, its highest since March 9.
Gold prices surged, extending gains for the third straight session as global equity markets eased after a recent rally, while U.S. Treasury yields declined ahead of the outcome of the Federal Reserve’s meeting. Spot gold was trading 0.2 percent up at $1,717.63 per ounce by 0524 GMT, having touched a low of $1,670.43 on Friday, its lowest since April 21. U.S. gold futures edged up 0.1 percent to $1,723.60.
Treasuries Recap
On Wednesday, the yield on benchmark 10-year Treasury notes was little changed at 0.8270 percent.
