Market Roundup
- Oil edges higher as traders eye producer talks
- Gold eases for third straight week
Economic Data Ahead
- (0330 ET/0730 GMT) UK Halifax House Prices (YoY/3m)(May)
- (0330 ET/0730 GMT) UK Halifax House Prices (MoM)(May)
- (0400 ET/0800 GMT) EZ Retail Sales s.a. (MoM)(Apr)
- (0400 ET/0800 GMT) EZ Retail Sales n.s.a (YoY)(Apr)
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index plunged to multi-month lows as investors awaited U.S. employment data due later in the day, which is expected to show nonfarm payrolls fell by 8 million in May after a record 20.537 million plunge in April, while the unemployment rate is forecast to soar to 19.8 percent, a post-World War II record, from 14.7 percent in April. The greenback against a basket of currencies traded 0.2 percent down at 96.53, having touched a low of 96.49 earlier, its lowest since March 12.
EUR/USD: The euro rallied, extending gains for the 10th straight session after the European Central Bank expanded its stimulus more than expected to prop up an economy dealing with its worst recession since World War II. The ECB increased its emergency bond purchase scheme by 600 billion euros to 1.35 trillion and extended the scheme to mid-2021. The European currency traded 0.1 percent up at 1.1345, having touched a high of 1.1362 on Thursday, its highest since March 11. Investors’ attention will remain on a series of data from Eurozone economies, ahead of the U.S. nonfarm payroll, unemployment rate, labour force participation, average hourly earnings and consumer credit change. Immediate resistance is located at 1.1396, a break above targets 1.1420. On the downside, support is seen at 1.1311, a break below could drag it below 1.1274.
USD/JPY: The dollar surged to a near 2-month peak amid optimism in financial markets as easing social distancing restrictions supported economic recovery hopes. The U.S. weekly jobless claims report showed the number of Americans filing for benefits declined below 2 million last week for the first time since mid-March. The major was trading 0.1 percent up at 109.21, having hit a high of 109.23 earlier, its highest since April 7. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. nonfarm payroll, unemployment rate, labour force participation, average hourly earnings and consumer credit change. Immediate resistance is located at 109.50, a break above targets 109.70. On the downside, support is seen at 108.70, a break below could take it near at 108.40 (5-DMA).
GBP/USD: Sterling advanced to an over 1-month high as some market participants speculate that the December transition deadline might get extended because of the new coronavirus pandemic, which slowed down Brexit negotiations. On Wednesday, Prime Minister Boris Johnson’s spokesman urged companies to prepare for Britain’s exit from the EU single market and customs union at the end of the year regardless of the outcome of talks. The major traded 0.3 percent up at 1.2639, having hit a high of 1.2639 on Thursday, it’s highest since April 30. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2673, a break above could take it near 1.2706. On the downside, support is seen at 1.2510 (5-DMA), a break below targets 1.2478. Against the euro, the pound was trading 0.2 percent up at 89.46 pence, having hit a low of 90.54 last week, it’s lowest since March 27.
AUD/USD: The Australian dollar jumped to a fresh 5-month high after analysts again upgraded their outlook for the Aussie in the latest Reuters poll. Median forecasts for the Australian dollar were raised by around a cent to $0.6400 in one month, $0.6450 in three and $0.6800 on a one-year horizon. The Aussie trades 0.7 percent up at 0.6989, having hit a high of 0.7004 earlier, it’s highest since Jan 2. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7031, a break above could take it near 0.7082. On the downside, support is seen at 0.6909, a break below targets 0.6844 (5-DMA).
Equities Recap
Asian shares erased early losses and were poised for their biggest weekly rise since 2011, bolstered by powerful central bank stimulus.
MSCI's broadest index of Asia-Pacific shares outside Japan surged 0.1 percent.
Tokyo's Nikkei rallied 0.6 percent to 22,835.50 points, Australia's S&P/ASX 200 index surged 0.1 percent to 5,998.70 points. South Korea's KOSPI jumped 1.5 percent to 2,182.27 points.
Shanghai composite index rose 0.2 percent to 2,925.92 points, while CSI 300 index traded 0.3 percent up at 3,993.73 points.
Hong Kong’s Hang Seng traded 0.9 percent higher at 24,579.91 points. Taiwan shares added 0.7 percent to 11,479.40 points.
Commodities Recap
Crude oil prices surged as traders await cues from a meeting that could take place as soon as this weekend where major oil producers will discuss whether to extend record production cuts. International benchmark Brent crude was trading 0.4 percent higher at $40.10 per barrel by 0504 GMT, having hit a high of $40.51 on Wednesday, its highest since March 9. U.S. West Texas Intermediate was trading 0.3 percent up at $37.39 a barrel, after rising as high as $38.15 on Wednesday, its highest since March 9.
Gold prices eased and was on track for a third straight weekly decline ahead of a highly awaited U.S. jobs report later in the day as markets pinned hopes on an economic recovery. Spot gold was trading 0.3 percent down at $1,710.08 per ounce by 0514 GMT, having touched a low of $1,689.58 on Wednesday, its lowest since May 7 and has declined about 0.8 percent so far this week, which could be its biggest fall since the week ending May 1. U.S. gold futures slid 0.7 percent to $1,714.50.
Treasuries Recap
On Thursday, the benchmark 10-year yield was up 5.7 basis points at 0.8184 percent, having touched as high as 0.822 percent, the most since March 27. The two-year U.S. Treasury yield was down less than a basis point at 0.196 percent.
