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Asia Roundup: Kiwi at 20-month peak as negative rate speculations ease, yen gains as investors adjust vaccine expectations, Asian shares surge - Thursday, November 20th, 2020

Posted at 12 November 2020 / Categories Market Roundups


Market Roundup

  • Oil nudges up on hopes OPEC+ will curb supply
     
  • Gold edges up on virus worries
     

Economic Data Ahead

  • (0400 ET/0900 GMT) EZ Economic Bulletin      
          
  • (0450 ET/0950 GMT) ECB's De Guindos speech  
     
  • (0500 ET/1000 GMT) EZ Industrial Production w.d.a. (YoY)(Sep)
     
  • (0500 ET/1000 GMT) EZ Industrial Production s.a. (MoM)(Sep)
     

Key Events Ahead

  • (0800 ET/1300 GMT) ECB's Panetta speech

FX Beat

DXY: The dollar index surged as U.S. President Donald Trump refused to concede defeat in the election. The greenback against a basket of currencies traded 0.05 percent up at 93.08, having touched a low of 92.13 on Monday, its lowest since September 1.

EUR/USD: The euro eased, weighed by Germany's economic advisers cutting 2021 growth projections. The German government’s council of economic advisers expects the economy to shrink less than initially feared this year but a second wave of the COVID-19 pandemic is clouding the growth outlook for next year. The council now sees the economy shrinking by 5.1 percent this year, while for 2021, the council lowered its GDP growth forecast to 3.7 percent from its previous estimate of 4.9 percent. The European currency traded 0.05 percent lower at 1.1772, having touched a low of 1.1745 on Wednesday, its lowest since November 5.  Investors’ attention will remain on a series of economic data from the Eurozone economies, EZ industrial production, and ECB officials' speeches, ahead of the U.S. consumer price index, unemployment benefit claims, monthly budget statement and Fed's Williams speech. Immediate resistance is located at 1.1809, a break above targets 1.1832. On the downside, support is seen at 1.1748 (10-DMA), a break below could drag it below 1.1717.

USD/JPY: The dollar declined, reversing most of its previous session gains, as traders adjusted positions before U.S. President-elect Joe Biden takes office next year. The major was trading 0.2 percent down at 105.23, having hit a high of 105.67 on Wednesday, its highest since October 20. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. consumer price index, unemployment benefit claims, monthly budget statement and Fed's Williams speech. Immediate resistance is located at 105.64, a break above targets 105.98. On the downside, support is seen at 104.93, a break below could take it near at 104.77 (21-DMA).

GBP/USD: Sterling fell, extending previous session losses, as markets feared that the economic fallout from a second nationwide lockdown, combined with the threat of a no-deal Brexit, could push the Bank of England to introduce negative rates in January. On Wednesday, an Irish minister said that a deal is unlikely to be reached this week and talks might go into next week. The major traded 0.1 percent down at 1.3199, having hit a high of 1.3313 on Wednesday, it’s highest since September 4. Immediate resistance is located at 1.3243, a break above could take it near 1.3278. On the downside, support is seen at 1.3175, a break below targets 1.3156. Against the euro, the pound was trading 0.1 percent down at 89.15 pence, having hit a high of 88.61 on Wednesday, it’s highest since May 15.

AUD/USD: The Australian dollar slumped after data showed net migration slipped 4,530 in September after a heftier fall in August. Over the past six months almost 16,000 people have left Australia in net terms. The Aussie trades 0.2 percent down at 0.7262, having hit a high of 0.7339 on Monday, it’s highest since September 16. Immediate resistance is located at 0.7318, a break above could take it near 0.7340. On the downside, support is seen at 0.7239, a break below targets 0.7215.        

NZD/USD: The New Zealand dollar plunged after rising to a 20-month high earlier in the session on easing expectations of negative rates. RBNZ Assistant Governor Christian Hawkesby told Bloomberg in an interview that less stimulus is required than we thought in August, but still a substantial amount of stimulus. The Kiwi traded 0.2 percent lower at 0.6865, having touched a high of 0.6914 earlier, its highest level since March 2019. Immediate resistance is located at 0.6930, a break above could take it near 0.6968. On the downside, support is seen at 0.6831, a break below could drag it below 0.6808.

Equities Recap

Asian shares rallied, supported by sustained global stimulus efforts and hopes of a coronavirus vaccine.

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

Tokyo's Nikkei surged 0.7 percent to 25,520.88 points, Australia's S&P/ASX 200 index eased 0.5 percent to 6,418.20 points. South Korea's KOSPI declined 0.4 percent to 2,475.06 points.

Shanghai composite index fell 0.1 percent to 3,338.25 points, while CSI 300 index traded 0.05 percent up at 4,907.20 points.

Hong Kong’s Hang Seng traded 0.4 percent lower at 26,120.60 points. Taiwan shares eased 0.3 percent to 13,221.78 points.

Commodities Recap

Crude oil prices rose on growing hopes that the world’s major producers will hold off on a planned supply increase as soaring cases of COVID-19 dent fuel demand. International benchmark Brent crude was trading 0.3 percent up at $43.87 per barrel by 0533 GMT, having hit a high of $45.27 on Wednesday, its highest since September 2. U.S. West Texas Intermediate was trading 0.4 percent higher at $41.55 a barrel, after rising as high as $43.18 on Wednesday, its highest since September 2.

Gold prices steadied after declining over 1 percent in the previous session, as concerns over the economic fallout from surging COVID-19 cases outweighed positive vaccine news. Spot gold rose 0.2 percent to $1,869.18 per ounce by 0539 GMT, having hit a low of $1850.53 on Monday, its lowest since September 28. U.S. gold futures were 0.4 percent higher at $1,869.30.

Treasuries Recap

The U.S. Treasury yields rose, with the benchmark 10-year note yield trading at 0.982 percent and the 30-year yield at 1.748 percent.

The Australian government bond futures were mixed, with the 3-year bond contract flat at 99.81. The 10-year contract jumped 6.5 ticks to 99.07.

The New Zealand government bonds rose slightly with yields on the long-end down 2 basis points.


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