News

America’s Roundup: Dollar weakens as euro climbs on EU common fund proposal, Wall Street climbs, Gold firms, Oil rise on recovery hopes-May 21st 2020

Market Roundup

• Fed acknowledges possibility of further support measures-minutes

• Canada April Core CPI (MoM) -0.4%, 0.7% previous

• Canada April CPI (MoM) -0.7%, -0.6% forecast, -0.6% previous

• Canada April Core CPI (YoY) 1.2%,1.6% previous

• Canada April CPI (YoY) -0.2%, -0.1% forecast, 0.9% previous

• Canada March Wholesale Sales (MoM) -2.2%,-3.8% forecast, 0.7% previous

• Canada Common CPI (YoY) 1.6%, 1.7% previous

• Canada Trimmed CPI (YoY) 1.8%, 1.8% previous

• Canada Median CPI (YoY) 2.0%, 2.0% previous

• US Seevol Cushing Storage Report -5.492M, -2.177M previous

• US Crude Oil Inventories -4.983M, 1.151M forecast, -0.745M previous

• US Gasoline Inventories 2.830M, -2.134M forecast, -3.513M previous

• US Cushing Crude Oil Inventories-5.587M, -3.002M previous

Looking Ahead Economic Data (GMT)

• 23:00 Australia Services PMI 19.5 previous

• 23:00 Australia Manufacturing PMI 44.1 previous

• 23:50 Japan April Imports (YoY) -12.9% forecast, -5.0% previous

• 23:50 Japan April Trade Balance -560.0B forecast, 5.4B previous

• 23:50 Japan April Exports (YoY) -22.7% forecast,-11.7% previous

• 23:50 Japan Foreign Bonds Buying 239.1B previous

• 23:50 Japan Foreign Investments in Japanese Stocks -86.6B previous

• 00:30 Japan May Manufacturing PMI 41.9 previous

• 00:30 Japan Services PMI 21.5 previous

• 03:00 New Zealand Credit Card Spending (YoY) -8.2% previous

Looking Ahead – Events, Other Releases (GMT)

• 02:30 Australia RBA Governor Lowe Speaks

Currency Summaries

EUR/USD: The euro rose to hit two weeks high against greenback on Wednesday as the common currency enjoyed a boost from the recently announced proposal for a common fund that could move Europe closer to a fiscal union as it tries to counter the economic hit from the coronavirus pandemic. The euro also found strength from survey data on Tuesday that showed German investor sentiment improved much more than expected in May. The single currency was up 0.54% at $1.0983 EUR=, its highest since May 1. Immediate resistance can be seen at 1.1001 (Higher BB), an upside break can trigger rise towards 1.1065(50% fib).On the downside, immediate support is seen at 1.0962 (38.2% fib), a break below could take the pair towards 1.0900 (Psychological level).

GBP/USD: Sterling edged higher against dollar on Wednesday, but clouds lingered over the pound after UK inflation fell below 1% to its lowest in nearly four years. The drop in inflation fuelled speculation the Bank of England would cut interest rates below zero to bolster an economy hammered by the coronavirus pandemic. Inflation sank to 0.8% in April, its lowest since August 2016. The pound fell after the data were released. Sterling then recovered as the dollar fell, last trading up 0.1% against the dollar at $1.2242.Immediate resistance can be seen at 1.2275 (50% fib),an upside break can trigger rise towards 1.2364 (61.8%fib).On the downside, immediate support is seen at 1.2206 (5 DMA), a break below could take the pair towards 1.2185 (38.2% fib).

USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Wednesday as hopes for a global economic recovery boosted equity markets and investors shrugged off domestic data showing deflationary pressures. Canada’s annual inflation rate fell by 0.2% in April, the first time it has hit negative territory since 2009, as the coronavirus pandemic slashed energy prices. At (21:16 GMT), the Canadian dollar was trading 0.4% higher at 1.3900 to the greenback. Immediate resistance can be seen at 1.3933 (38.2% fib), an upside break can trigger rise towards 1.3995 (50% fib).On the downside, immediate support is seen at 1.3854 (23.6% fib), a break below could take the pair towards 1.3807 (Lower BB).

USD/JPY: The dollar rose against the Japanese yen on Wednesday as downbeat economic data weighed on Japanese yen. The sentiment index at manufacturers slumped to minus 44 in May from minus 30 in the previous month, the lowest since June 2009, while the service-sector gauge plunged to minus 36 from minus 23, the worst reading since December 2009. The downbeat findings came after data this week showed the world’s third-largest economy slipped into its first recession in 4-1/2 years last quarter. Strong resistance can be seen at 107.80 (38.2 % fib), an upside break can trigger rise towards 108.16 (Higher BB).On the downside, immediate support is seen at 107.57 (30 DMA), a break below could take the pair towards 106.57 (50 % fib).

Equities Recap

European shares swung higher on Wednesday as hopes of a rebound from a coronavirus-led economic slump charged Wall Street and technology stocks rose on both sides of the Atlantic.

UK’s benchmark FTSE 100 closed up by 1.08 percent, Germany’s Dax ended up by 1.31 percent, France’s CAC finished the day up by 0.87 percent.

The three major averages on Wall St notched their fourth gain in five sessions on Wednesday as investors again bet on a swift economic recovery from coronavirus-driven lockdowns and the potential for more stimulus measures from the Federal Reserve.

Dow Jones closed up by 1.52 percent, S&P 500 ended up by 1.67 percent, Nasdaq finished up by 2.08 percent.

Treasuries Recap

U.S. Treasury yields slipped on Wednesday after a somewhat underwhelming debut of the first 20-year bond in decades left the market uncertain how the new government financing tool will fit in.

The benchmark 10-year yield was last down 2.6 basis points at 0.685%, just below its level before the sale results were announced and extending a decline from Tuesday’s late levels.

Commodities Recap

Gold rose on Wednesday amid extensive stimulus measures and uncertainty over a possible coronavirus vaccine, but bullion’s gains were limited as risk appetite improved on hopes of an economic recovery.

Spot gold was up 0.3% at $1,749.29 per ounce by 2:05 p.m. EDT (1805 GMT). U.S. gold futures settled up 0.4% at $1,752.10.

Oil prices rallied on Wednesday after U.S. crude inventories fell in the most recent week, but gains were capped by worries over the economic fallout from the coronavirus pandemic and weak refining margins.

U.S. crude futures rose $1.53 to settle at $33.49 a barrel, while Brent gained $1.10 to settle at $35.75 a barrel.


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