Posted at 23 August 2019 / Categories Market Roundups
Market Roundup
Economic Data Ahead
Key Events Ahead
FX Beat
DXY: The dollar index rose after Philadelphia Federal Reserve Bank President Patrick Harker and Kansas City Federal Reserve Bank President Esther George both said they saw no immediate need to cut rates. Investors now await a closely watched Fed Chairman Powell’s speech at the Jackson Hole seminar due later in the day for clarity on monetary policy after minutes of the U.S. central bank’s July meeting tempered hopes of aggressive rate cuts. The greenback against a basket of currencies traded 0.2 percent up at 98.37, having touched a high of 98.45 on Tuesday, its highest since August 1.
EUR/USD: The euro plunged to a fresh 3-week low as the weakness in the Eurozone manufacturing sector and future expectations the European Central Bank was on track to ease policy in September dented investor sentiment. The European currency traded 0.1 percent down at 1.1067, having touched a low of 1.1060 earlier, its lowest since August 1. Investors’ attention will remain on the U.S. new home sales and series of speeches by Fed officials, amid a lack of economic data from the Eurozone docket. Immediate resistance is located at 1.1102 (23.6% retracement of 1.1230 and 1.1060, a break above targets 1.1146 (50.0% retracement). On the downside, support is seen at 1.1045, a break below could drag it below 1.1026 (August 1 Low).
USD/JPY: The dollar edged up, reversing most of its previous session losses on expectations a crucial speech by Federal Reserve Chairman Jerome Powell will reinforce that the U.S. central bank has not entered a prolonged monetary easing cycle. The major was trading 0.2 percent up at 106.63, having hit a low of 105.05 last week, its lowest since Jan 3. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. new home sales and series of speeches by Fed officials. Immediate resistance is located at 106.85 (21-DMA), a break above targets 107.56 (August 2 High). On the downside, support is seen at 105.89 (August 8 Low), a break below could take it lower at 105.29 (Aug. 9 Low).
GBP/USD: Sterling plunged after rising to a 3-1/2 week peak hit in the previous session and was on course for a second weekly gain, despite the uncertainty over how Britain will complete its transition from the European Union. The major traded 0.2 percent down at 1.2219, having hit a high of 1.2273 on Thursday, it’s highest since July 29. Investors’ attention will remain on the development surrounding Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2331 (61.8% retracement of 1.2522 and 1.2079), a break above could take it near 1.2417 (78.6% retracement). On the downside, support is seen at 1.2156 (21-DMA), a break below targets 1.2108 (10-DMA). Against the euro, the pound was trading 0.2 percent down at 90.58 pence, having hit a high of 90.28 on Thursday, it’s highest since July 29.
AUD/USD: The Australian dollar declined to a 1-week low, ahead of the Fed Chair Jerome Powell's scheduled speech at Jackson Hole Symposium later during the North-American session. The Aussie trades 0.05 percent down at 0.6752, having hit a low of 0.6745 earlier, it’s lowest since August 14. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6735 (August 13 Low), a break below targets 0.6700. On the upside, resistance is located at 0.6831 (38.2% retracement of 0.7082 and 0.6677), a break above could take it near 0.6879 (50% retracement).
NZD/USD: The New Zealand dollar steadied after falling to multi-year lows in the previous session after Reserve Bank of New Zealand Governor Adrian Orr told Bloomberg TV he can afford to wait on monetary policy after surprising investors earlier this month with a sharp 50-basis-point rate cut. The Kiwi trades 0.4 percent up at 0.6387, having touched a low of 0.6361 on Thursday, its lowest level January 2016. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6425 (10-DMA), a break above could take it near 0.6462 (23.6% retracement of 0.6790 and 0.6376). On the downside, support is seen at 0.6345, a break below could drag it below 0.6300.
Equities Recap
Asian shares nudged higher despite uncertainty over how much further the U.S. Federal Reserve would cut interest rates.
MSCI's broadest index of Asia-Pacific shares outside Japan edged 0.1 percent higher and was up 0.8 percent for the week.
Tokyo's Nikkei rallied 0.4 percent to 20,710.91 points, Australia's S&P/ASX 200 index surged 0.3 percent to 6,523.10 points and South Korea's KOSPI fell 0.1 percent to 1,948.30 points.
Shanghai composite index rose 0.5 percent to 2,897.43 points, while CSI 300 index traded 0.7 percent up at 3,820.86 points.
Hong Kong’s Hang Seng traded 0.6 percent higher at 26,200.21 points. Taiwan shares added 0.1 percent to 10,538.11 points.
Commodities Recap
Crude oil prices edged up, reversing some of its previous day’s losses, as tighter supplies from key producers offset slowing demand growth, while investors await clues on the U.S. Federal Reserve’s monetary policy. International benchmark Brent crude was trading 0.2 percent higher at $60.09 per barrel by 0555 GMT, having hit a high of $60.37 on Wednesday, its highest since August 14. U.S. West Texas Intermediate was trading 0.2 percent up at $55.47 a barrel, after rising as high as $57.11 on Wednesday, its highest since August 13.
Gold prices eased, extending losses for the third straight session and was set for its worst week in nearly five months, as lack of clarity from U.S. Federal Reserve on the outlook for interest rate cuts triggered investors to cash in some gains ahead of Jerome Powell’s speech at Jackson Hole. Spot gold was trading 0.2 percent down at $1,494.68 per ounce by 0557 GMT and has lost nearly 1.3 percent so far this week, putting it on track for its biggest weekly percentage decline since March 29. U.S. gold futures slipped 0.3 percent at $1,504.20 an ounce.
Treasuries Recap
The two-year, 10-year Treasury yield curve briefly moved back into inversion overnight.