(04 September 2020)DAILY MARKET BRIEF 1:EUR/USD is slightly down
At the time of writing, Japan’s Nikkei 225 is down 1.21% after surging on Thursday. Chief Cabinet Secretary Yoshihide Suga has the most chances to succeed Shinzo Abe as prime minister, according to recent polls.
China’s Shanghai Composite has dropped 1.35% while the tech-oriented Shenzhen Component has declined by 1.81%.
Hong Kong’s Hang Seng Index is down 1.72%, despite the fact that the city is easing some social distancing measures.
South Korea’s KOSPI has lost 1.30%, while Australia’s S&P/ASX 200 has been the worst performer in Asia, falling 3% so far. On Friday, Australia’s state of Victoria reported a record 59 deaths, bringing the daily total for the country to a record high.
European equities will likely open down, as all index futures are in red right now.
In the commodity market, oil prices have declined as investors are worried about crude demand amid ample supplies. WTI has declined by 0.90% to $41.00, and Brent is down 0.80% to $43.73. Thus, the two brands are set to conclude the worst week since June.
The volume of oil imported by China, the world's largest importer of crude, is about to slow this month after rising for five consecutive months, as refiners have to assimilate the huge supply. Also, production in the Gulf of Mexico is about to restart soon after the halt forced by Hurricane Laura.
Elsewhere, gold has benefited from the stock selloff, adding 0.37% for the day so far, to $1,944. Investors look for refuge as the Fed is determined to keep the zero rates for much longer.
In FX, the US dollar is steady ahead of the nonfarm payrolls report. The USD Index, which tracks the greenback against six other currencies, is now up 0.07%. EUR/USD is slightly down 0.01%. Earlier this week, the European Central Bank hinted that the euro was too strong for the current monetary policy, suggesting that some action will be taken. Nevertheless, general sentiment on the US dollar remains weak, as the Fed intends to maintain the low interest rates for longer than anticipated. Chicago Fed President Charles Evans said that he supports a rise in inflation to 2.5% from the current target of 2%.
