Posted at 29 May 2020 / Categories Market Roundups
Market Roundup
Economic Data Ahead
Key Events Ahead
FX Beat
DXY: The dollar index slumped to a 2-1/2 month low after Hong Kong’s government warned that withdrawing its special U.S. status, could be a double-edged sword and urged the United States to stop interfering in internal affairs. The greenback against a basket of currencies traded 0.2 percent down at 98.26, having touched a low of 98.18 earlier, its lowest since March 17.
EUR/USD: The euro rallied to a 2-month peak as the EU’s announcement of a 750-billion-euro coronavirus recovery fund fuelled optimism about the euro-zone economy. The European currency traded 0.2 percent up at 1.1100, having touched a high of 1.1110 earlier, its highest since March 30. Investors’ attention will remain on a series of data from Eurozone economies, EZ M3 money supply and consumer price index, ahead of the U.S. personal consumption expenditures - prices, wholesale inventories, personal income, goods trade balance, personal spending, Chicago purchasing managers index and Michigan consumer sentiment index. Immediate resistance is located at 1.1132, a break above targets 1.1167. On the downside, support is seen at 1.1039, a break below could drag it below 1.1010.
USD/JPY: The dollar plunged to a near 2-week low, as traders’ focus shifted to U.S. President Donald Trump’s response to China’s passage of a national security law for Hong Kong. On Thursday, China’s parliament approved national security legislation for Hong Kong that Western countries fear could erode the city’s freedoms. The major was trading 0.4 percent down at 107.21, having hit a low of 107.07 earlier, its lowest since May 18. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. personal consumption expenditures - prices, wholesale inventories, personal income, goods trade balance, personal spending, Chicago purchasing managers index and Michigan consumer sentiment index. Immediate resistance is located at 107.84, a break above targets 108.08. On the downside, support is seen at 106.99, a break below could take it near at 106.74.
GBP/USD: Sterling rose against a weaker dollar, although Brexit-related risks and speculation about negative interest rates limit the pound’s upside. The major traded 0.2 percent up at 1.2340, having hit a high of 1.2363 on Tuesday, it’s highest since May 12. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2377, a break above could take it near 1.2420. On the downside, support is seen at 1.2288, a break below targets 1.2249 (5-DMA). Against the euro, the pound was trading flat at 89.89 pence, having hit a low of 90.00 last week, it’s lowest since March 27.
AUD/USD: The Australian dollar surged, extending previous session gains as investors cheered the gradual re-opening of business activity. The Aussie trades 0.4 percent up at 0.6661, having hit a high of 0.6680 on Wednesday, it’s highest since March 9. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6680, a break above could take it near 0.6733. On the downside, support is seen at 0.6586 (5-DMA), a break below targets 0.6561 (10-DMA).
Equities Recap
Asian shares declined as investors awaited Washington’s response to China tightening control over the city of Hong Kong.
MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.1 percent.
Tokyo's Nikkei fell 0.2 percent to 21,877.89 points, Australia's S&P/ASX 200 index plunged 1.6 percent to 5,755.70 points. South Korea's KOSPI nudged up 0.05 percent to 2,029.60 points.
Shanghai composite index rose 0.2 percent to 2,852.35 points, while CSI 300 index traded 0.3 percent up at 3,867.02 points.
Hong Kong’s Hang Seng traded 0.8 percent lower at 22,952.38 points. Taiwan shares shed 0.05 percent to 10,942.16 points.
Commodities Recap
Crude oil prices declined after data from the Energy Information Administration showed that U.S. crude oil and distillate inventories rose sharply last week, while fuel demand remained slack. International benchmark Brent crude was trading 1.7 percent lower at $34.76 per barrel by 0611 GMT, having hit a high of $36.96 last week, its highest since March 11. U.S. West Texas Intermediate was trading 2.2 percent down at $32.95 a barrel, after rising as high as $34.78 on Tuesday, its highest since March 11.
Gold prices nudged up as the U.S.-China rift deepened over further moves by Beijing to impose a security law on Hong Kong. Spot gold trading 0.05 percent up at $1,718.90 per ounce by 0614 GMT, having touched a low of $1,694.00 on Wednesday, its lowest since May 11. U.S. gold futures rose 0.4 percent to $1,734.60.
Treasuries Recap
On Thursday, the U.S. benchmark 10-year notes rose three basis points to 0.703 percent. The yields have traded in a range from 0.543 percent to 0.785 percent since the beginning of April.