Asia Roundup: Aussie eases as virus cases mount, gold steadies near more than 8-year high, Asian shares nudge lower – Wednesday, July 8th, 2020

Market Roundup

  • Oil dips on U.S. inventory build
  • Gold steadies near highest since November 2011

Economic Data Ahead

  • No major economic data releases

Key Events Ahead

  • (0445 ET/0845 GMT) ECB’s De Guindos speech

FX Beat

DXY: The dollar index eased as Federal Reserve officials expressed concern that rising coronavirus cases could harm economic growth just as stimulus measures start to expire. The greenback against a basket of currencies traded 0.05 percent lower at 96.90, having touched a low of 96.57 on Monday, its lowest since June 24.

EUR/USD: The euro steadied after tumbling from a near 2-week peak in the prior session on the European Commission forecast that the eurozone economy will drop deeper into recession this year and rebound less steeply in 2021 than previously expected, with France, Italy and Spain struggling the most due to the COVID-19 pandemic. The European currency traded 0.05 percent down at 1.1268, having touched a high of 1.1345 on Monday, its highest since June 23. Investors’ attention will remain on a series of data from Eurozone economies and ECB De Guindos speech, ahead of the U.S. consumer credit change. Immediate resistance is located at 1.1325, a break above targets 1.1372. On the downside, support is seen at 1.1247 (10-DMA), a break below could drag it below 1.1215.

USD/JPY: The dollar nudged higher, extending previous session gains after data showed U.S. hiring surged to a record high in May and layoffs fell as businesses reopened. The monthly Job Openings and Labor Turnover Survey showed hiring accelerated by 2.4 million jobs to 6.5 million, the highest since the government started tracking the series in 2000, while the hiring rate jumped to an all-time high of 4.9 percent from 3.1 percent in April. The major was trading 0.05 percent up at 107.55, having hit a low of 107.24 on Tuesday, its lowest since June 29. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. consumer credit change. Immediate resistance is located at 107.90, a break above targets 108.20. On the downside, support is seen at 107.10, a break below could take it near at 106.73.

GBP/USD: Sterling surged, extending gains for the fourth straight session, as traders awaited British finance minister Rishi Sunak’s announcement later in the day of his next moves to prevent a wave of job cuts from damaging an already weakened economy. The major traded 0.1 percent up at 1.2553, having hit a high of 1.2593 on Tuesday, it’s highest since June 16. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2634, a break above could take it near 1.2687. On the downside, support is seen at 1.2507, a break below targets 1.2463. Against the euro, the pound was trading 0.1 percent up at 89.80 pence, having hit a high of 89.67 on Tuesday, it’s highest since June 18.

AUD/USD: The Australian dollar declined, extending previous session losses, as a resurgence of the coronavirus in the United States and the return of lockdowns in some countries weakened risk sentiment. The major trades 0.1 percent down at 0.6934, having hit a high of 0.6997 on Tuesday, it’s highest since June 11. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6974, a break above could take it near 0.6997. On the downside, support is seen at 0.6908 (10-DMA) a break below targets 0.6877.

Equities Recap

Asian shares eased as an increase in new coronavirus cases in some parts of the world cast doubts over the economic recovery.

MSCI’s broadest index of Asia-Pacific shares outside Japan traded edged 0.1 percent lower.

Tokyo’s Nikkei fell 0.7 percent to 22,438.65 points, Australia’s S&P/ASX 200 index eased 1.5 percent to 5,920.30 points. South Korea’s KOSPI declined 0.2 percent to 2,158.88 points.

Shanghai composite index rose 1.7 percent to 3,403.32 points, while CSI 300 index traded 1.6 percent up at 4,773.03 points.

Hong Kong’s Hang Seng traded 0.4 percent higher at 26,069.32 points. Taiwan shares added 0.6 percent to 12,170.19 points.

Commodities Recap

Crude oil prices declined as industry data showing a build in U.S. crude stockpiles and a forecast for U.S. crude output to fall less than anticipated in 2020 added to worries about oversupply. International benchmark Brent crude was trading 0.05 percent down at $42.94 per barrel by 0542 GMT, having hit a high of $43.68 on Monday, its highest since June 23. U.S. West Texas Intermediate was trading 0.05 percent lower at $40.40 a barrel, after rising as high as $41.06 on Monday, its highest since June 23.

Gold prices steadied near a more than 8-year high, as worries over surging COVID-19 cases and hopes of more stimulus measures from the U.S. Federal Reserve boosted the safe-haven metal’s demand. Spot gold was trading flat at $1,794.46 per ounce by 0548 GMT, hovering towards a high of $1,797.41 on Tuesday, its highest since November 2011. U.S. gold futures eased 0.2 percent to $1,805.70.

Treasuries Recap

The U.S. Treasury yields edged higher, with the benchmark 10-year note yield trading at 0.648 percent.

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