Posted at 10 September 2019 / Categories Market Roundups
Market Roundup
Economic Data Ahead
Key Events Ahead
FX Beat
DXY: The dollar index surged as the U.S. Treasury yields rose to 3-week highs on Monday after Treasury Secretary Steven Mnuchin stated that there had been progress on a U.S-China trade deal and that the U.S. was prepared to negotiate. The greenback against a basket of currencies traded 0.2 percent up at 98.38, having touched a low of 98.01 on Friday, its lowest since August 28.
EUR/USD: The euro traded within narrow ranges, as investors stayed on the sidelines ahead of a key European Central Bank meeting on Thursday, at which policymakers are expected to ease monetary policy. The European currency traded flat at 1.1042, having touched a high of 1.1084 on Thursday, its highest since August 29. Investors’ attention will remain on a series of data from the Eurozone economies, ahead of the U.S. JOLTS job opening data. Immediate resistance is located at 1.1075 (21-DMA), a break above targets 1.1116 (August 27 High). On the downside, support is seen at 1.1000, a break below could drag it below 1.0963 (August 30 High).
USD/JPY: The dollar rallied to an over 1-month peak as U.S. Treasury Secretary Steven Mnuchin said he did not see the threat of a recession as the Trump administration seeks to revive trade negotiations with China. However, data showing China’s producer price index fell 0.8 percent in August year-on-year, it's sharpest decline since August 2016 limited the upside in the pair. The major was trading 0.2 percent up at 107.39, having hit a high of 107.49 earlier, its highest since August 2. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. JOLTS job opening data. Immediate resistance is located at 107.56 (August 2 High), a break above targets 108.00. On the downside, support is seen at 106.67 (5-DMA), a break below could take it lower at 105.73 (September 3 Low).
GBP/USD: Sterling steadied after rising to a 6-week peak in the previous session on data that showed Britain’s economy picked up more than expected in July. On Tuesday, Britain’s parliament rejected Prime Minister Boris Johnson’s call for a national parliamentary election and a law came into force demanding that PM Johnson delay Britain’s departure from the European Union unless he can strike a transition deal. The major traded flat at 1.2341, having hit a high of 1.2384 on Monday, it’s highest since July 26. Investors’ attention will remain on the development surrounding Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2400, a break above could take it near 1.2456 (July 17 High). On the downside, support is seen at 1.2258 (5-DMA), a break below targets 1.2218 (10-DMA). Against the euro, the pound was trading flat at 89.49 pence, having hit a high of 89.04 on Monday, it’s highest since July 25.
AUD/USD: The Australian dollar eased from a 6-week peak touched in the prior session after China reported downbeat producer price index and the National Bank of Australia reported a decline in the business confidence index. Australian NAB business confidence fell to 1 in August from July's print of 4, while business conditions index deteriorated to 1 from 3 despite the rate cuts by the Reserve Bank of Australia in June and July. The Aussie trades traded 0.1 percent down at 0.6859, having hit a high of 0.6875 on Monday, it’s highest since July 31. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6815 (5-DMA), a break below targets 0.6777 (August 9 Low). On the upside, resistance is located at 0.6899 (July 31 High), a break above could take it near 0.6955 (July 26 High).
NZD/USD: The New Zealand dollar rose, extending gains for the seventh straight session, boosted by from increasing prospects of the U.S.-China trade deal and expectations for China’s further stimulus after the People’s Bank of China said it will cut the reserve requirements for financial institutions. The Kiwi trades 0.1 percent up at 0.6430, having touched a high of 0.6444 on Monday, its highest level since August 16. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6471 (August 13 High), a break above could take it near 0.6498 (August 9 High). On the downside, support is seen at 0.6382 (5-DMA), a break below could drag it below 0.6325 (September 4 Low).
Equities Recap
Asian shares slumped after Chinese data showed mainland factory prices shrank at their fastest pace in three years, as flagging demand at home and abroad forced some businesses to slash prices.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2 percent.
Tokyo's Nikkei rose 0.4 percent to 21,392.10 points, Australia's S&P/ASX 200 index eased 0.5 percent to 6,614.10 points and South Korea's KOSPI surged 0.7 percent to 2,032.87 points.
Shanghai composite index declined 0.3 percent to 3,015.40 points, while CSI 300 index traded 0.5 percent down at 3,953.97 points.
Hong Kong’s Hang Seng traded 0.05 percent lower at 26,673.15 points. Taiwan shares shed 0.4 percent to 10,753.58 points.
Commodities Recap
Crude oil price surged to an over 1-month peak amid optimism that OPEC and other countries may agree to extend production cuts in a bid to support prices. International benchmark Brent crude was trading 0.1 percent higher at $62.74 per barrel by 0451 GMT, having hit a high of $63.11 earlier, its highest since August 1. U.S. West Texas Intermediate was trading 0.1 percent up at $58.36 a barrel, after rising as high as $58.36 earlier, its highest since July 31.
Gold prices plunged to a 1-month low as investor appetite improved on hopes of global stimulus amid expectations of a breakthrough in the U.S.-China trade dispute. Spot gold was trading 0.6 percent down at $1,489.63 per ounce by 0454 GMT, having touched a low of $1,486.34 earlier, its lowest since August 13. U.S. gold futures were down 0.9 percent at $1,497.4 an ounce.
Treasuries Recap
The Japanese government bond prices slipped across the board, amid an improvement in risk appetite. The five-year JGB yield rose 3 basis points to minus 0.320 percent. The benchmark 10-year yield climbed 3.5 bps to minus 0.225 percent, pulling away from a three-year low of minus 0.295 percent set on Friday. The 30-year yield was 5.5 bps higher at 0.275 percent.
The benchmark 10-year Australian government bond futures fell 6.25 ticks to 98.90, approaching a five-week low.