Daily Market Updates 12.08.2020
Wednesday 12.08.2020
Asian Session
Asian Shares were mostly lower in Asia on today after Wall Street shares pumped the brakes on its yesterday rally as investors reassess the economy. Japan’s index Nikkei 225 has gained 0.4%, while Hong Kong’s Hang Seng HSI, edged lower by 0.2%. In South Korea, the Kospi index remained flat and is traded at 0.25% higher and the Shanghai Composite index fell by 2%. Concerns over the coronavirus pandemic and tensions between Sino-Americans have prompted investors to sell and lock in profits from recent gains, as analysts said.
| Asian Stock | Closed |
| Nikkei | +1.88% |
| Hong Kong HSI | +2.11% |
| China Shanghai SSE | -1.15% |
| KOSPI – South Korea | +1.4% |
US Stocks
US equities slipped from yesterday gains and close the day lower with a selloff in technology shares as investors reassessed the economic outlook amid a slowdown in infections of the coronavirus cases, along with the lack of evolvement towards new relief package from Washington. The Dow Jones Industrial Average finished with a loss of 104.53 points or 0.4%, while SP500 lost 26.78 points lower, a loss of 0.8% and Nasdaq dropped by 1.7%. The unprecedented efforts by Fed to stabilize the market by cutting rates and ramping up bond purchases, caused the stock’s attractiveness relative to other assets.
| U.S Stocks | Closed |
| DOW | -0.4% |
| S&P500 | -0.8% |
| NASDAQ | -1.7% |
Major Currencies
Euro/Dollar is traded with a firm bias after falling to 1.1723 in Asia and gained to 1.1756 at European open before jumping to an intra-day high at 1.1807 in early trading. Investors should pay attention to the release of EU industrial production. According to Street forecasts for mm and yy are 10.0% and -11.5% vs previous readings of 12.4% and -20.9% respectively. The preliminary reading of the second quarter 2020 UK GDP showed -20.4% QoQ vs. -20.5% better expected and -2.2% last, while on an annualized basis the figure stood at -21.7% vs. -22.4% expected and -1.7% seen previously and caused the drop on Pound. The UK GDP monthly release showed that the UK economy expanded sharply in June, arriving at +8.7% versus +8.0% expected and +1.8% previous. Pound now is trying to recover from 1.303 price level. A combination of factors underpinned Dollar against Yen to gain traction for the fourth consecutive session. The dollar remained supported by hopes of a US economic recovery, surging US bond yields. The pair is currently traded around 106.7. A decline in virus hospitalizations in the US boosted investors’ confidence and revived hopes of a US economic recovery.
Gold Market
While bond yield rising gold depreciating as traditionally happen and that why gold started losing value dropping back again to $1860 price level so fast. Haven metal posted the biggest drop in seven years after bond yields spiked higher. Treasury bond yields climbed, cutting into the negative real rates that had supported the metal. The 10-year Treasury yield jumped the most since June ahead of an expected flood of government and corporate debt issuance. Analysts expecting that may find gold back up at $2400 by the end of the year.
Oil Market
Benchmark U.S. crude oil for September delivery CLU20, 0.65% gained 18 cents to $41.79 per barrel in electronic trading on the New York Mercantile Exchange. It dropped to 0.8% to settle at $41.61 per barrel on Tuesday. Brent crude oil for October delivery BRNV20, 0.76% picked up 24 cents to $44.74 per barrel. Overnight, it lost 1.1% to settle at $44.50 per barrel. Oil prices advanced higher today after an industry report showed that U.S. inventories of crude fell more than analysts had expected.
European Stocks
European equities on futures markets plunged along with most Asian stock markets Wednesday amid doubts over the timing of a spending package from Washington and some position-trimming in high-flying sectors. Euro-Stoxx600 index yesterday gained 1.68%.
On the data front 12-08-2020
| Time (GMT+3) | Event | Impact |
| 05:00 am | NZD RBNZ Rate Statement | High |
| 05:00 am | NZD RBNZ Interest Rate Decision | High |
| 09:00 am | GBP Gross Domestic Product (QoQ) (Q2) | High |
| 15:30 pm | USD Consumer Price Index ex Food & Energy (YoY)(Jul) | High |
