America’s Roundup: Dollar dips on dovish U.S. Fed policy bets,Wall Street climbs,Gold gains, Oil edges lower, shrugging off Gulf of Mexico shut-ins-September 15th,2020

Posted at 14 September 2020 / Categories Market Roundups

Market Roundup

•U.S. Fed's policy announcement on Wednesday

•UK, US, Japan central banks meet this week

•Japan’s Suga wins ruling party leadership race

•UK parliament to vote on plan to break Brexit divorce treaty

•US 6-Month Bill Auction 0.110%, 0.105% previous

•US 3-Month Bill Auction 0.120%, 0.115% previous

•Brazil Jul IBC-Br Economic Activity 2.15%, 3.40% forecast, 4.89% previous

Looking Ahead – Economic Data (GMT)

•21:00 New Zealand Westpac Consumer Sentiment (Q3)  , 97.2 previous

•01:30 Australia House Price Index (QoQ) (Q2) -1.0% forecast, 1.6% previous

•02:00 Chinese Unemployment Rate 5.7% previous

•02:00 Chinese Aug Industrial Production (YoY)  5.1% forecast,4.8% previous

•02:00 Chinese Aug Retail Sales (YoY)  0.1% forecast,-1.1% previous

•02:00 Chinese Aug Chinese Industrial Production YTD (YoY)  -0.4% previous

•02:00 Chinese Aug Fixed Asset Investment (YoY) -0.4% forecast, -1.6% previous

Looking Ahead - Events, Other Releases (GMT)

•01:30  Australia RBA Meeting Minutes

Fx Beat 

EUR/USD: The euro edged higher against dollar on Monday as encouraging signs of progress in developing a COVID-19 vaccine buoyed sentiment. Pfizer Inc and BioNTech SE on Saturday proposed expanding their Phase 3 pivotal COVID-19 vaccine trial to about 44,000 participants, while increasing the diversity of the trial population. The Fed starts a two-day policy meeting on Tuesday, the first since unveiling a landmark shift to a more tolerant stance on inflation in August. The Bank of Japan and the Bank of England announce their respective policy decisions on Thursday. Immediate resistance can be seen at 1.1892 (61.8% fib), an upside break can trigger rise towards 1.1935 (Higher BB).On the downside, immediate support is seen at 1.1829 (5DMA), a break below could take the pair towards 1.1751 (Lower BB ).

GBP/USD:The pound rose against the dollar on Monday, as investors waited for a key Brexit vote and weighed up the chance of a no-deal Brexit.Sterling had its worst week in six months last week, as investors grew more pessimistic about the chances of a Brexit deal being reached before the December 2020 deadline. Britain threw Brexit trade talks into disarray last week by proposing legislation that would break international law by breaching parts of the Withdrawal Agreement which was signed in January. Immediate resistance can be seen at 1.2927 (55DMA), an upside break can trigger rise towards 1.2989 ( 50%fib).On the downside, immediate support is seen at 1.2882 (38.2% fib), a break below could take the pair towards 1.2771 (Sep 14th low).

USD/CAD: The Canadian dollar was little changed against its U.S. counterpart on Monday as investors turned attention to a Federal Reserve interest rate decision later in the week, although it fell against most other G10 currencies. The Canadian dollar   was trading nearly unchanged at 1.3179 to the greenback . The currency, which fell last week for the first time in six weeks, traded in a range of 1.3154 to 1.3196. Canada's inflation report for August is due on Wednesday,while the July retail sales report is set for Friday. The data could help guide expectations for economic recovery. Immediate resistance can be seen at 1.3211 (50%fib), an upside break can trigger rise towards 1.3259(Sep 9th high).On the downside, immediate support is seen at 1.3139 (21 DMA), a break below could take the pair towards 1.3115 (38,2%fib).

USD/JPY: The dollar declined against the Japanese yen on Monday as investors looked ahead to an event-packed week which includes a Fed meeting and the appointment of a new Japanese premier. This week’s U.S. Federal Reserve meeting will be its first since Chairman Jerome Powell unveiled a policy shift towards greater tolerance of inflation, effectively pledging to keep interest rates low for longer. The yen rose 0.2% to around 105.72 yen to the dollar, a five-day high. Strong resistance can be seen at 106.16 (Daily high), an upside break can trigger rise towards 106.57 (Higher BB).On the downside, immediate support is seen at 105.80(Sep 9th low), a break below could take the pair towards 105.54  (38.2%fib).

Equities Recap

Europe’s STOXX 600 inched higher on Monday as surging travel and technology stocks helped counter losses in the energy sector, with investors focused on Brexit-related developments and central bank actions later this week.

UK's benchmark FTSE 100 closed up by  0.10 percent, Germany's Dax ended down by 0.07 percent, France’s CAC finished the day up by 0.36 percent.                        

Wall Street’s major indexes climbed on Monday on a boost from technology stocks while signs of progress in developing a COVID-19 vaccine and a spurt of multi-billion dollar deals also brightened the mood.

Dow Jones closed up  by  1.18% percent, S&P 500 closed up by 1.27% percent, Nasdaq settled down  by 1.87%  percent.

Treasuries Recap

Investors kept U.S. Treasury yields stable on Monday as they tried to gauge how the U.S. Federal Reserve will put its new approach to monetary policy into practice.

The benchmark 10-year yield was down less than a basis point at 0.6641% in afternoon trading, close to the middle of the range where it has traded since late March.  

Commodities Recap

Gold prices rose on Monday supported by a weaker dollar, while investors looked forward to the U.S. Federal Reserve policy meeting later this week for more cues on stimulus measures and inflation target.

Spot gold was up 0.2% at $1,944.69 per ounce by 0647 GMT. U.S. gold futures rose 0.3% to $1,953.20.

Oil prices slipped slightly on Monday amid concerns about a stalled global economic recovery and with Libya poised to resume production, and failed to get support from an impending storm which has disrupted U.S. output.

Brent crude settled down 22 cents, or 0.6%, at $39.61 a barrel while U.S. West Texas Intermediate (WTI) crude futures  were down 7 cents, or 0.2%, at $37.26 a barrel.

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