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Asia Roundup: Dollar slumps across the board on abysmal U.S. economic data, Asian shares plunge, investors eye EZ CPI - Friday, July 31st, 2020

Posted at 31 July 2020 / Categories Market Roundups


Market Roundup

  • Oil prices hovers towards 3-week low
     
  • Gold set for best month in four years
     

Economic Data Ahead

  • (0500 ET/0900 GMT)  Italy Consumer Price Index (YoY)(Jul) PREL           
        
  • (0500 ET/0900 GMT)  Italy Consumer Price Index (EU Norm) (MoM)(Jul) PREL    
     
  • (0500 ET/0900 GMT)  Italy Consumer Price Index (MoM)(Jul) PREL   
            
  • (0500 ET/0900 GMT)  Italy Consumer Price Index (EU Norm) (YoY)(Jul) PREL     
       
  • (0500 ET/0900 GMT)  EZ Consumer Price Index - Core (YoY)(Jul) PREL     
     
  • (0500 ET/0900 GMT)  EZ Gross Domestic Product s.a. (QoQ)(Q2) PREL   
      
  • (0500 ET/0900 GMT)  EZ Consumer Price Index (YoY)(Jul) PREL   
     
  • (0500 ET/0900 GMT)  EZ Gross Domestic Product s.a. (YoY)(Q2) PREL    
       
  • (0600 ET/1000 GMT)  Italy Retail Sales s.a. (MoM)(Jun)  
     
  • (0600 ET/1000 GMT)  Italy Retail Sales n.s.a (YoY)(Jun)
     

Key Events Ahead

  • No Significant Events Scheduled

FX Beat

DXY: The dollar index declined, amid expectations the Fed will maintain its ultra-loose monetary policy for years, while U.S. President Donald Trump raised the possibility of delaying the November election. The greenback against a basket of currencies traded 0.4 percent down at 92.59, having touched a low of 92.55 earlier, its lowest since May 2018.

EUR/USD: The euro rallied to an over 2-year peak above the 1.1900 handle, after data released yesterday showed Euro zone economic sentiment rebounded more than expected in July, while the industry gained. Moreover, EU leaders deal on a massive recovery fund that will bring the bloc closer to a fiscal union continued to support the euro bulls’ sentiment. The European currency traded 0.3 percent higher at 1.1886, having touched a high of 1.1905 earlier, its highest since May 2018. Investors’ attention will remain on a series of data from Eurozone economies, EZ consumer price index, and gross domestic product, ahead of the U.S. personal consumption expenditures, personal income, personal spending, Chicago Purchasing Managers' Index and Michigan Consumer Sentiment Index. Immediate resistance is located at 1.1926, a break above targets 1.1955. On the downside, support is seen at 1.1797, a break below could drag it below 1.1751 (5-DMA).

USD/JPY: The dollar slumped to a near 5-month low earlier in the session as U.S. GDP collapsed at a 32.9 percent annualized rate in the second quarter, the deepest decline on record, while jobless claims rose last week, adding to signs the momentum of economic recovery has slowed. The major was trading 0.3 percent down at 104.37, having hit a low of 104.18, its lowest since March 12. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. personal consumption expenditures, personal income, personal spending, Chicago Purchasing Managers' Index and Michigan Consumer Sentiment Index. Immediate resistance is located at 104.95, a break above targets 105.23 (5-DMA). On the downside, support is seen at 104.03, a break below could take it near at 103.79.

GBP/USD: Sterling rallied to an over 4-1/2 month peak near the 1.3200 handle, as the greenback eased across the board. However, the upside in the British pound appears limited as the UK and European Union made little progress on post-Brexit trade arrangements. The major traded 0.3 percent up at 1.3136, having hit a high of 1.3143 earlier, it’s highest since March 9. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3200, a break above could take it near 1.3240. On the downside, support is seen at 1.3017, a break below targets 1.2938 (5-DMA). Against the euro, the pound was trading 0.2 percent down at 90.61 pence, having hit a high of 90.16 on Thursday, it’s highest since July 21.

AUD/USD: The Australian dollar surged to an over 1-year high as risk sentiment slightly improved after factory activity gauges for July in China and for June in South Korea came in better than expected, fuelling hopes that the worst impact from the health crisis has passed. The Aussie trades 0.4 percent higher at 0.7193, having hit a high of 0.7227 earlier, it’s highest since February 2019. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7245, a break above could take it near 0.7273. On the downside, support is seen at 0.7157 (5-DMA), a break below targets 0.7116 (10-DMA).

Equities Recap

Asian shares slumps as downbeat economic data from the United States and rising global COVID-19 cases weighed on investor sentiment.

MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.2 percent.

Tokyo's Nikkei declined 2.8 percent to 21,710.00 points, Australia's S&P/ASX 200 index eased 2.05 percent to 5,927.80 points. South Korea's KOSPI fell 0.8 percent to 2,249.37 points.

Shanghai composite index rose 0.7 percent to 3,310.01 points, while CSI 300 index traded 0.8 percent up at 4,695.05 points.

Hong Kong’s Hang Seng traded 0.2 percent lower at 24,651.45 points. Taiwan shares shed 0.5 percent to 12,664.80 points.

Commodities Recap

Crude oil prices declined, hovering towards 3-week lows hit in the prior session on a record drop in U.S. growth as the coronavirus ravaged the world’s biggest economy and oil consumer. International benchmark Brent crude was trading 0.5 percent down at $43.06 per barrel by 0544 GMT, having hit a low of $41.41 on Tursday, its lowest since July 10. U.S. West Texas Intermediate was trading 0.8 percent lower at $39.99 a barrel, after falling as low as $38.74 on Thursday, its lowest since July 10.

Gold prices surged and were on track for their best month in more than four years, as a weaker dollar and worries over the global economic fallout from the mounting COVID-19 cases dented investor sentiment. Spot gold was trading 0.9 percent higher at $1,973.01 per ounce by 0558 GMT, having hit an all time high of $1,981.35 on Tuesday. The safe-haven metal rose 10 percent so far this month, its biggest percentage rise since February 2016 and was also on track for its eighth straight weekly gain. U.S. gold futures rose 0.5 percent to $1,953.

Treasuries Recap

The U.S. Treasury yields edged lower, with the benchmark 10-year note yield trading at 0.530 percent.


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