America’s Roundup: Dollar retreats on stimulus talks, Wall Street ends higher, Gold gains, Oil edges up to highest since March on hopes for U.S. stimulus-August 5th,2020

Market Roundup

• US Redbook (YoY) -7.1%,-8.7% previous

• US Redbook (MoM) 1.1%, 1.1% previous         

• US Jul All Truck Sales  11.02M  , 10.09M previous

• US Jul All Car Sales  3.50M, 2.97M previous

• Canada Jul RBC Manufacturing PMI  52.9, 47.8 previous

• US Jul ISM NY Business Conditions  53.5%,39.5% previous

• US Jul ISM-New York Index  807.8, 806.0 previous

• US Jun Durables Excluding Defense (MoM) 9.5%,  9.2% previous

• US Jun Factory Orders (MoM)  6.2%,5.0%forecast ,8.0% previous

• New Zealand GlobalDairyTrade Price Index-5.1%,-0.7% previous

Looking Ahead Economic Data

• 22:30 Australia Jul IG Construction Index 35.5 previous

• 22:45 New Zealand Unemployment Rate (Q2) 5.8%forecast, 4.2%previous

• 22:45 New Zealand Participation Rate (Q2) 69.80%forecast,70.40% previous

• 22:45 New Zealand Employment Change (QoQ) (Q2) -2.0% forecast, 0.7% previous

• 22:50 Australia Services PMI 58.5 forecast, 53.1 previous

• 00:30 Japan Jul Services PMI  45.2 forecast, 45.0 previous

• 01:45 Chinese Jul Composite PMI  54.254.2

• 01:45 Chinese Jul Caixin Services PMI  

Looking Ahead – Events, Other Releases (GMT)

•No significant events

Currencies Summaries

EUR/USD: The euro edged higher against dollar on Tuesday as investors awaited U.S. stimulus breakthrough. Euro held its ground against dollar despite strong U.S. manufacturing data . Focus remains on deadlocked stimulus negotiations in the U.S. which will continue on Tuesday. Focus was also on the European Central Bank’s breakdown of its bond purchases, released late on Monday, which showed Italy continued to benefit from oversized ECB purchases of its debt in June and July under both the emergency and conventional bond buying programmes. Immediate resistance can be seen at 1.1799 (38.2% fib), an upside break can trigger rise towards 1.1829 (23.6%fib).On the downside, immediate support is seen at 1.1711(50%fib), a break below could take the pair towards 1.614 (61.8%fib).

GBP/USD: Sterling edged lower on Tuesday erasing earlier gains as fears of a second wave of virus infections and a Bank of England policy meeting later this week capped the pound’s advance.The move lower reversed a trend earlier in the session where the pound had been advancing towards a five-month high hit last week versus the dollar. Sterling fell 0.27% to $1.3043 against the dollar and rose 0.13% against the euro to 90.10pence. Immediate resistance can be seen at 1.3113 (Daily high), an upside break can trigger rise towards 1.3182 (23.6% fib).On the downside, immediate support is seen at 1.2976 (38.2%fib), a break below could take the pair towards 1.2777(50%fib).

USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Tuesday as investors weighed rising coronavirus cases and increased tensions between the United States and China. Canada runs a current account deficit and is a major producer of commodities, including oil, so the loonie tends to be sensitive to the global flow of trade and capital.U.S. crude prices were down 1.6% at $40.35 a barrel amid concerns that a fresh wave of COVID-19 infections will see a global demand recovery stalling due to tighter lockdowns, just as major producers ramp up output .Immediate resistance can be seen at 1.3379 (5 DMA), an upside break can trigger rise towards 1.3461 (21 DMA).On the downside, immediate support is seen at 1.3304 (23.6%fib), a break below could take the pair towards 1.3127(30th Jan low).

USD/JPY: The dollar edged lower against the Japanese yen on Tuesday as political wrangling over a U.S. relief plan and a gloomy economic outlook weighed greenback. After its worst month in a decade in July, the greenback started August on a firm note as some investors trimmed their short positions. Despite a slowdown in new U.S. virus cases and encouraging factory data, investors are reserving judgement on whether a U.S. economy with 30 million people out of work can really lead the world’s recovery. Strong resistance can be seen at 106.41 (50% fib), an upside break can trigger rise towards 107.13(50 DMA).On the downside, immediate support is seen at 105.49 (5 DMA), a break below could take the pair towards 105.13 (38.2% fib).

Equities Recap

A surge in BP shares after it laid out plans to cut its oil and gas output and boost investments in renewable energy offset disappointing earnings reports including from spirits maker Diageo, although European stocks closed largely flat.

The UKs benchmark FTSE 100 closed up by 0.05 percent, Germanys Dax ended down by 0.36 percent, and France’s CAC finished the up by 0.28 percent.

Wall Street ended higher after a choppy session on Tuesday, lifted by Apple and energy stocks but limited by declines in AIG and Microsoft while investors awaited more U.S. government stimulus to fight economic fallout from the COVID-19 pandemic.

 Dow Jones closed up by 0.62  percent, S&P 500 ended up 0.36 percent, Nasdaq finished the day up by 0.35 percent.

Treasuries Recap

The five-year Treasury yield hit a record low on Tuesday and the benchmark 10-year Treasury yield fell to a five-month bottom, indicating safe-haven demand from bond investors wary of a slow U.S. economic recovery.

The 10-year yield hit a low of 0.505%, the second-lowest yield ever recorded at that maturity. The lowest was hit on March 9 as the coronavirus pandemic was gathering steam in the United States, prior to the Fed’s intervention in financial markets.

Commodities Recap

Gold surged past the $2,000 mark on Tuesday after Democrats and the White House appeared closer to agreement on new stimulus to help the coronavirus-hit economy while stocks on Wall Street traded mixed as investors awaited more aid from Washington.

Spot gold prices rose 1.42% to $2,004.81 an ounce, after bids earlier hit highs of $2,009.134 an ounce.

Brent oil futures on Tuesday closed at their highest since early March on hopes the United States is making progress on a new economic stimulus package, as well as curbing the coronavirus spread.

Brent rose 28 cents, or 0.6%, to settle at $44.43 a barrel, its highest close since March 6. U.S. West Texas Intermediate (WTI) crude rose 69 cents, or 1.7%, to $41.70, its highest finish since July 21

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