• Asia roundup: Japanese Yen gains as China passes national security law, Dollar steadies as investors eye U.S. manufacturing PMI, Asian shares nudge higher - Wednesday, July 1st, 2020

    Source: FxWire Pro - Media Round Ups / 01 Jul 2020 03:14:38   America/New_York

    Market Roundup

    • Oil rises following a drop in U.S. crude stocks
       
    • Gold firms near 8-year peak amid virus fears
       

    Economic Data Ahead

    • (0350 ET/0750 GMT) France Markit Manufacturing PMI(Jun)       
       
    • (0355 ET/0755 GMT) Germany Unemployment Rate s.a.(Jun)    
       
    • (0355 ET/0755 GMT) Germany Unemployment Change(Jun)      
       
    • (0355 ET/0755 GMT) Germany Markit Manufacturing PMI(Jun)
       
    • (0400 ET/0800 GMT) EZ Markit Manufacturing PMI(Jun)                
       
    • (0430 ET/0830 GMT) UK Markit Manufacturing PMI(Jun)
       

    Key Events Ahead

    • No Significant Events Scheduled

    FX Beat

    DXY: The dollar index consolidated within narrow ranges as investors await the U.S. Institute for Supply Management’s purchasing managers’ index for manufacturing due later in the day, which is expected to show that activity in June continued to recover from an 11-year low marked in April. The greenback against a basket of currencies traded flat at 97.39, having touched a high of 97.80 on Tuesday, its highest since June 2.

    EUR/USD: The euro declined, extending previous session losses, amid mixed signals about the eurozone economy and limited progress in talks on the future trade relationship between Britain and the EU. Investors now await data on Germany’s manufacturing sector and the jobless rate to gauge the health of the eurozone economy. The European currency traded 0.1 percent down at 1.1223, having touched a high of 1.1348 last week, its highest since June 16. Investors’ attention will remain on a series of data from Eurozone economies, and Markit manufacturing PMI, ahead of U.S. ADP employment change, construction spending, manufacturing PMI by both ISM and Markit and FOMC minutes. Immediate resistance is located at 1.1270, a break above targets 1.1332. On the downside, support is seen at 1.1185, a break below could drag it below 1.1154.

    USD/JPY The dollar declined from a 3-week peak as a surge in coronavirus infections in the U.S. south and southwest worried some market participants. While some investors are wary of diplomatic tensions over Beijing’s new security law for the former British colony of Hong Kong, which came into effect. The major was trading 0.3 percent down at 107.62, having hit a high of 108.16 earlier, its highest since June 9. Investors’ will continue to track the broad-based market sentiment, ahead of U.S. ADP employment change, construction spending, manufacturing PMI by both ISM and Markit and FOMC minutes. Immediate resistance is located at 108.52, a break above targets 108.77. On the downside, support is seen at 107.38 (5-DMA), a break below could take it near at 107.11 (10-DMA).

    GBP/USD: Sterling eased, reversing some of its previous session gains, amid fears that Britain will fail to secure a trade deal with the European Union by the end of 2020 deadline. Data released yesterday showed Britain’s economy shrank by the most since 1979 in the first quarter of 2020 as households slashed their spending. The major traded 0.2 percent down at 1.2375, having hit a low of 1.2251 on Monday, it’s lowest since May 28. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2456, a break above could take it near 1.2511. On the downside, support is seen at 1.2314, a break below targets 1.2251. Against the euro, the pound was trading 0.2 percent down at 90.72 pence, having hit a low of 91.75 on Monday, it’s lowest since March 26.

    AUD/USD: The Australia dollar declined from a 1-week peak as new Hong Kong security laws came into effect today that will punish crimes of secession, subversion, terrorism and collusion with foreign forces with up to life in prison. The Aussie trades 0.1 percent down at 0.6898, having hit a high of 0.6917 earlier, it’s highest since June 24. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6949, a break above could take it near 0.6987. On the downside, support is seen at 0.6847 a break below targets 0.6807.

    Equities Recap

    Asian shares gained as improving economic data offset by worries that surging coronavirus cases in the United States could derail the world’s recovery.

    MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.4 percent.

    Tokyo's Nikkei declined 0.8 percent to 22,121.73 points, Australia's S&P/ASX 200 index gained 0.6 percent to 5,934.40 points. South Korea's KOSPI eased 0.2 percent to 2,103.48 points.

    Shanghai composite index rose 1.1 percent to 3,018.40 points, while CSI 300 index traded 1.7 percent up at 4,235.35 points.

    Taiwan shares added 0.7 percent to 11,703.42 points.

    Commodities Recap

    Crude oil prices rose after data showed crude inventories in the United States fell much more than expected, suggesting demand is improving even as the coronavirus outbreak spreads around the world.  International benchmark Brent crude was trading 0.5 percent up at $41.70 per barrel by 0531 GMT, having hit a low of $39.45 on Thursday, its lowest since June 16. U.S. West Texas Intermediate was trading 0.3 percent lower at $39.70 a barrel, after falling as low as $37.07 on Thursday, its lowest since June 16.

    Gold prices surged, hovering towards a near 8-year peak hit in the previous session, boosted by worries about the global economic impact of surging coronavirus infections around the world. Spot gold was trading 0.2 percent higher at $1,784.68 per ounce by 0540 GMT, having touched a high of $1,786.02 on Tuesday, its highest since October 2012. U.S. gold futures were steady at $1,800.60.

    Treasuries Recap

    The U.S. Treasury yields rose, with the benchmark 10-year note yield trading at 0.677 percent.

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