Market Roundup
- Oil prices drop on fuel demand fears
- Gold gains after U.S. Fed ramps up support measures
Economic Data Ahead
- (0500 ET/0900 GMT) EZ ZEW Survey - Economic Sentiment(Jun)
- (0500 ET/0900 GMT) EZ Labor Cost(Q1)
- (0500 ET/0900 GMT) Germany ZEW Survey - Current Situation(Jun)
- (0500 ET/0900 GMT) Germany ZEW Survey - Economic Sentiment(Jun)
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index nudged lower as the Fed will make its debt purchases from today in the secondary market and said it would also be buying bonds directly from issuers in the near term. The greenback against a basket of currencies traded 0.1 percent down at 96.54, having touched a low of 95.72 on Wednesday, its lowest since March 10.
EUR/USD: The euro rose, extending previous session gains, as the greenback declined after the U.S. Federal Reserve widened its program of buying corporate debt to combat the financial toll of the pandemic. The European currency traded 0.1 percent up at 1.1339, having touched a low of 1.1212 on Friday, its lowest since June 4. Investors’ attention will remain on a series of data from Eurozone economies and EZ ZEW Survey - Economic Sentiment, ahead of U.S. retail sales, industrial production, capacity utilization, NAHB Housing Market Index, Fed Clarida's speech and Fed Chair Powell's testimony. Immediate resistance is located at 1.1372, a break above targets 1.1403. On the downside, support is seen at 1.1291, a break below could drag it below 1.1257.
USD/JPY: The dollar surged to near 1-week peak as risk sentiment improved after the U.S. Federal Reserve announced it would begin purchasing a diversified range of investment-grade U.S. corporate bonds. Investors now await Fed Chair Jerome Powell's testimony before a virtual hearing of the Senate Banking Committee later in the day. The major was trading 0.1 percent up at 107.45, having hit a low of 106.57 on Thursday, its lowest since May 11. Investors’ will continue to track the broad-based market sentiment, ahead of U.S. retail sales, industrial production, capacity utilization, NAHB Housing Market Index, Fed Clarida's speech and Fed Chair Powell's testimony. Immediate resistance is located at 107.83 (21-DMA), a break above targets 108.10 (10-DMA). On the downside, support is seen at 106.98, a break below could take it near at 106.74.
GBP/USD: Sterling advanced, hovering towards the 1.2700 handle, after leaders from Britain and the European Union agreed that talks on their future relationship should be stepped up to clinch a deal. The major traded 0.5 percent up at 1.2668, having hit a low of 1.2454 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 1.2722, a break above could take it near 1.2813. On the downside, support is seen at 1.2550, a break below targets 1.2478. Against the euro, the pound was trading 0.4 percent down at 89.49 pence, having hit a low of 90.24 on Monday, it’s highest since May 29.
AUD/USD: The Australian dollar gained after the Reserve Bank of Australia reiterated in minutes from its June meeting that the national economic downturn may not be as bad as initially feared. The Aussie trades 0.4 percent up at 0.6943, having hit a low of 0.6776 on Monday, it’s lowest since June 2. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7004, a break above could take it near 0.7042. On the downside, support is seen at 0.6856, a break below targets 0.6839.
Equities Recap
Asian shares surged as the formal start of the Federal Reserve’s corporate bond-buying programme boosted global investor sentiment.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 2.2 percent.
Tokyo's Nikkei rallied 4.9 percent to 22,605.54 points, Australia's S&P/ASX 200 index surged 4.3 percent to 5,966.10 points. South Korea's KOSPI jumped 4.6 percent to 2,124.57 points.
Shanghai composite index rose 1.2 percent to 2,924.35 points, while CSI 300 index traded 1.3 percent up at 4,004.91 points.
Hong Kong’s Hang Seng traded 2.8 percent higher at 24,422.09 points. Taiwan shares added 1.8 percent to 11,511.64 points.
Commodities Recap
Crude oil prices declined, halting a 2-day winning streak amid lingering concerns over the threat to fuel demand from the resurgence of new coronavirus infections around the world. International benchmark Brent crude was trading 0.7 percent lower at $39.58 per barrel by 0505 GMT, having hit a low of $36.98 on Friday, its lowest since May 29. U.S. West Texas Intermediate was trading 0.2 percent down at $36.90 a barrel, after falling as low as $34.38 on Monday, its lowest since May 29.
Gold prices surged after the U.S. Federal Reserve widened its program of buying corporate debt to combat the financial toll of the pandemic amid growing worries about a second wave of coronavirus infections. Spot gold was trading 0.1 percent up at $1,727.11 per ounce by 0509 GMT, having touched a high of $1,744.91 on Thursday, its highest since June 2. U.S. gold futures rose 0.6 percent to $1,737.80.
Treasuries Recap
The benchmark U.S. 10-year Treasury yields notes edged up to 0.7363 percent, while the spread between 2-year and 10-year yields widened to 54 basis points.
