News

Asia Roundup: Yen rallies as rising coronavirus cases threaten economic reopening, investors eye German CPI data – Monday, June 29th, 2020

Market Roundup

  • Oil declines as coronavirus spike dents demand hopes
  • Gold rallies as virus concerns boost safe-haven bid

Economic Data Ahead

  • (0500 ET/0900 GMT) EZ Services Sentiment(Jun)
  • (0500 ET/0900 GMT) EZ Consumer Confidence(Jun)
  • (0500 ET/0900 GMT) EZ Industrial Confidence(Jun)
  • (0500 ET/0900 GMT) EZ Business Climate(Jun)
  • (0500 ET/0900 GMT) EZ Economic Sentiment Indicator(Jun)
  • (0800 ET/1200 GMT) Germany Consumer Price Index (YoY)(Jun) PREL
  • (0800 ET/1200 GMT) Germany Consumer Price Index (MoM)(Jun) PREL
  • (0800 ET/1200 GMT) Germany Harmonized Index of Consumer Prices (YoY)(Jun) PREL
  • (0800 ET/1200 GMT) Germany Harmonized Index of Consumer Prices (MoM)(Jun) PREL

Key Events Ahead

  • No Significant Events Scheduled

FX Beat

DXY: The dollar index declined after rising for three straight sessions, as the demand for dollars eased off as the U.S. Federal Reserve flooded markets with liquidity. The greenback against a basket of currencies traded 0.3 percent down at 97.19, having touched a low of 96.39 on Tuesday, its lowest since June 11.

EUR/USD: The euro rose, halting a 3-day losing streak, as investors awaited eurozone confidence data due at 0900 GMT and German inflation figures at 1200 GMT for the latest gauge of the region’s economic health. The European currency traded 0.3 percent up at 1.1253, having touched a high of 1.1348 on Tuesday, its highest since June 16. Investors’ attention will remain on a series of data from Eurozone economies, and EZ economic sentiment indicator, ahead of U.S. pending home sales and Dallas Fed Manufacturing Business Index. Immediate resistance is located at 1.1269, a break above targets 1.1332. On the downside, support is seen at 1.1190, a break below could drag it below 1.1168.

USD/JPY: The dollar eased as the relentless spread of the coronavirus intensified investor fears about a delay in global economic recovery and weighed on risk appetite. On Sunday, California ordered some bars to close, following similar moves in Texas and Florida, as cases nationwide rose to record levels. The major was trading 0.1 percent down at 107.10, having hit a high of 107.45 on Thursday, its highest since June 16. Investors’ will continue to track the broad-based market sentiment, ahead of U.S. pending home sales and Dallas Fed Manufacturing Business Index. Immediate resistance is located at 107.59 (21-DMA), a break above targets 108.10. On the downside, support is seen at 106.76, a break below could take it near at 106.51.

GBP/USD: Sterling rose after tumbling to a near 4-week low hit in the prior session on uncertainty over Brexit negotiations and worries over a second wave of COVID-19 infections as Britain eases its lockdown measures. The major traded 0.4 percent up at 1.2384, having hit a low of 1.2314 on Friday, it’s lowest since June 1. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2465 (10-DMA), a break above could take it near 1.2533 (21-DMA). On the downside, support is seen at 1.2290, a break below targets 1.2233. Against the euro, the pound was trading 0.1 percent down at 90.95 pence, having hit a low of 91.00 on earlier, it’s lowest since March 26.

AUD/USD: The Australian dollar gained after data showed profits at China’s industrial firms rose for the first time in six months in May, suggesting the recovery is gaining traction. The Aussie trades 0.3 percent up at 0.6885, having hit a high of 0.6974 on Tuesday, it’s highest since June 16. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6929, a break above could take it near 0.6960. On the downside, support is seen at 0.6807 a break below targets 0.6776.

Equities Recap

Asian shares plunged as the relentless spread of the coronavirus made investors question their optimism on the global economy.

MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 1.3 percent.

Tokyo’s Nikkei declined 2.3 percent to 21,995.04 points, Australia’s S&P/ASX 200 index tumbled 1.5 percent to 5,815.00 points. South Korea’s KOSPI slumped 1.9 percent to 2,093.48 points.

Shanghai composite index fell 0.6 percent to 2,960.67 points, while CSI 300 index traded 0.8 percent down at 4,107.31 points.

Hong Kong’s Hang Seng traded 1.3 percent lower at 24,219.55 points. Taiwan shares shed 1.01 percent to 11,542.62 points.

Commodities Recap

Crude oil prices declined, extending previous session losses as coronavirus cases rose in the United States and other places, leading some countries to resume partial lockdowns that could dent fuel demand. International benchmark Brent crude was trading 1.2 percent lower at $40.18 per barrel by 0542 GMT, having hit a low of $39.45 on Thursday, its lowest since June 16. U.S. West Texas Intermediate was trading 1.3 percent up at $37.67 a barrel, after falling as low as $37.07 on Thursday, its lowest since June 16.

Gold prices surged as worries over a rise in COVID-19 infections globally dented optimism about a swift economic rebound. Spot gold was trading 0.1 percent up at $1,773.43 per ounce by 0547 GMT, having touched a high of $1,779.44 on Wednesday, its highest since October 2012. U.S. gold futures rose 0.5 percent to $1,788.40 per ounce.

Treasuries Recap

The U.S. Treasury yields edged higher, with the benchmark 10-year note yield trading at 0.652 percent.


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