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Asia Roundup: Antipodeans ease on risk aversion, yen gains as virus spread accelerates, Asian shares slump - Friday, November 13th, 2020

Posted at 13 November 2020 / Categories Market Roundups


Market Roundup

  • Oil falls on COVID-19 surge
     
  • Gold heads for worst week in seven
     

Economic Data Ahead

  • (0500 ET/1000 GMT) EZ Employment Change (YoY)(Q3) PREL      
     
  • (0500 ET/1000 GMT) EZ Trade Balance n.s.a.(Sep)        
        
  • (0500 ET/1000 GMT) EZ Gross Domestic Product s.a. (QoQ)(Q3) PREL      
     
  • (0500 ET/1000 GMT) EZ Gross Domestic Product s.a. (YoY)(Q3) PREL        
     
  • (0500 ET/1000 GMT) EZ Trade Balance s.a.(Sep)          
          
  • (0500 ET/1000 GMT) EZ Employment Change (QoQ)(Q3) PREL 
     

Key Events Ahead

  • (0500 ET/1000 GMT) German Buba President Weidmann speech

FX Beat

DXY: The dollar index eased after U.S. Federal Reserve Chair Jerome Powell said during a discussion with other central bankers that progress in developing a coronavirus vaccine was welcome news but that near-term economic risks remain as infections accelerate, underscoring the likely need for additional government stimulus. The greenback against a basket of currencies traded down at 92.94, having touched a low of 92.13 on Monday, its lowest since September 1.

EUR/USD: The euro rose, extending previous session gains, as the greenback eased as a second wave of infections prompted the re-imposition of restrictions to stop the virus' spread. The European currency traded 0.1 percent higher at 1.1809, 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 Trade Balance, Employment Change, and Gross Domestic Product s.a. Prel, ahead of the U.S. producer price index, Michigan Consumer Sentiment Index and Fed's Williams speech. Immediate resistance is located at 1.1832, a break above targets 1.1855. On the downside, support is seen at 1.1778, a break below could drag it below 1.1748.

USD/JPY: The dollar declined as investors feared the economic impact of an accelerating rise in coronavirus infections. The United States reported fresh daily records for new COVID-19 case hospitalisations this week, prompting cities and states to re-impose public health restrictions.  The major was trading 0.2 percent down at 104.93, 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. producer price index, Michigan Consumer Sentiment Index and Fed's Williams speech. Immediate resistance is located at 105.34, a break above targets 105.65. On the downside, support is seen at 104.61 (10-DMA), a break below could take it near at 104.32.

GBP/USD: Sterling gained, halting a 2-day losing streak after a spokesman for Prime Minister Boris Johnson said that Britain has been working hard throughout the trade negotiations with the bloc to secure a deal. On Thursday, the major weakened by nearly 1 percent on news that Britain’s economy grew by a slower-than-expected 1.1 percent between August and September. The major traded 0.3 percent up at 1.3138, having hit a high of 1.3313 on Wednesday, it’s highest since September 4. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3180, a break above could take it near 1.3218. On the downside, support is seen at 1.3078, a break below targets 1.3053. Against the euro, the pound was trading 0.1 percent up at 89.82 pence, having hit a high of 88.61 on Wednesday, it’s highest since May 15.

AUD/USD: The Australian dollar steadied after plunging to a 1-week low earlier in the session on renewed worries about the health of the global economy. Moreover, uncertainty around Australia’s relationship with China further dented risk sentiment after the Asian giant suspended imports of all timber from Victoria state. Investors now eye a dinner speech by Reserve Bank of Australia Governor Philip Lowe on Monday. The Aussie trades 0.1 percent up at 0.7235, having hit a low of 0.7221 earlier, it’s lowest since November 5. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7265 (5-DMA), a break above could take it near 0.7293 On the downside, support is seen at 0.7202, a break below targets 0.7182.       

NZD/USD: The New Zealand dollar tumbled from a 20-month high, weighed down by the persistent rise in coronavirus cases. The Kiwi traded 0.3 percent lower at 0.6818, having touched a high of 0.6914 on Thursday, its highest level since March 2019. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6872 a break above could take it near 0.6893. On the downside, support is seen at 0.6801, a break below could drag it below 0.6783.

Equities Recap

Asian shares declined, pressured by fears about a slow recovery in the global economy and accelerating rise in COVID-19 infections.

MSCI’s broadest index of Asia-Pacific shares outside Japan plunged 0.25 percent.

Tokyo's Nikkei eased 0.5 percent to 25,385.87 points, Australia's S&P/ASX 200 index slumped 0.2 percent to 6,405.20 points. South Korea's KOSPI rose 0.7 percent to 2,493.87 points.

Shanghai composite index fell 0.9 percent to 3,310.10 points, while CSI 300 index traded 1.05 percent down at 4,856.85 points.

Hong Kong’s Hang Seng traded 0.4 percent lower at 26,056.18 points. Taiwan shares rose 0.4 percent to 13,273.33 points.

Commodities Recap

Crude oil prices declined, weighed down by fears about a slow recovery in the global economy and fuel demand due to an accelerating rise in COVID-19 infections. International benchmark Brent crude was trading 1.05 percent down at $42.87 per barrel by 0545 GMT, having hit a high of $45.27 on Wednesday, its highest since September 2. U.S. West Texas Intermediate was trading 1.4 percent lower at $40.35 a barrel, after rising as high as $43.18 on Wednesday, its highest since September 2.

Gold prices steadied as fears over the economic fallout from mounting cases of COVID-19 overshadowed hopes of a vaccine, although the safe-haven metal was on track for its worst weekly performance since late-September. Spot gold gained 0.1 percent to $1,878.31 per ounce by 0547 GMT. The metal is down 3.8 percent so far for the week. U.S. gold futures gained 0.2 percent to $1,876.50.

Treasuries Recap

The U.S. Treasury yields fell, with the benchmark 10-year note yield trading at 0.867 percent and the 30-year yield at 1.613 percent.

The Australian government bond futures were mixed, with the 3-year bond contract flat at 99.825 and the 10-year contract rose 3 ticks to 99.115.

The New Zealand government bonds rose, sending yields about 3-4 basis points lower across the curve.


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