Market Roundup
- NZD/USD consolidates near its lowest level since May 2009
- AUD/USD hits multi-years lows near 0.5950
- U.S. retail sales fall in February
Economic Data Ahead
- (0500 ET/1000 GMT) EZ Trade Balance n.s.a. (Jan)
- (0500 ET/1000 GMT) Consumer Price Index (MoM) (Feb)
- (0500 ET/1000 GMT) Consumer Price Index - Core (YoY) (Feb)
- (0500 ET/1000 GMT) Consumer Price Index - Core (MoM) (Feb)
- (0500 ET/1000 GMT) Consumer Price Index (YoY) (Feb)
- (0500 ET/1000 GMT) Trade Balance s.a. (Jan)
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index held firm near a 3-1/2 week peak after the Trump administration pursued a $1 trillion stimulus package that could deliver $1,000 checks to Americans within two weeks to support an economy hit by the virus. On Tuesday, the Fed stated that it would reinstate a funding facility to get credit directly to businesses and households as fears over a liquidity crunch grew. The greenback against a basket of currencies traded 0.1 percent up at 99.41, having touched a high of 98.83 on Tuesday, its highest since Feb. 21.
EUR/USD: The euro steadied above the 1.1000 handle after tumbling to a 2-1/2 week low in the previous session on a survey that showed the sentiment among German investors slumped in March to levels last seen at the beginning of the world financial crisis in 2008. The ZEW research institute’s monthly survey showed economic sentiment among investors collapsed to -49.5 from 8.7 in February, its biggest decline since the survey began in 1991. The European currency traded 0.5 percent down at 1.1044, having touched a low of 1.0954 on Tuesday, its lowest since Feb. 28. Investors’ attention will remain on a series of data from the Eurozone economies, EZ trade balance figures and consumer price index, ahead of the U.S. building permits and housing starts. Immediate resistance is located at 1.1082 (23.6% retracement of 1.1495 and 1.0954), a break above targets 1.1161 (38.2% retracement). On the downside, support is seen at 1.0907, a break below could drag it below 1.0855.
USD/JPY: The dollar declined, reversing some of its previous session gains after data showed U.S. retail sales fell by the most in over a year in February. The coronavirus epidemic is expected to depress sales in the months ahead, which could strengthen economists’ expectations of a consumer-led recession by the second quarter. The major was trading 0.5 percent down at 107.07, having hit a high of 108.50 on Friday, its highest since March 3. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. building permits and housing starts. Immediate resistance is located at 108.08, a break above targets 108.79. On the downside, support is seen at 106.48, a break below could take it near at 106.12 (5-DMA).
GBP/USD: Sterling held near a 6-1/2 month low hit in the prior session as Britain toughened its approach to containing the coronavirus outbreak. On Monday, Prime Minister Boris Johnson tightened restrictions and placed curbs on social life in Britain. Investors expect Bank of England to announce more stimulus measures after its next meeting on March 26, including potentially further rate cuts or restarting quantitative easing asset purchases. The major traded 0.4 percent higher at 1.2099, having hit a low of 1.2001 on Tuesday, it’s lowest since Sep. 3. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2284 (23.6% retracement of 1.3200 and 1.2001), a break above could take it near 1.2459 (38.2% retracement). On the downside, support is seen at 1.1958, a break below targets 1.1904. Against the euro, the pound was trading 0.2 percent up at 91.03 pence, having hit a low of 91.50 on Monday, it’s lowest since Aug. 22.
AUD/USD: The Australian dollar eased, hovering towards a 17-year low hit in the prior session after the Reserve Bank of Australia reiterated it stands ready to ease policy further in the face of the unprecedented spread of the coronavirus, adding to speculation about aggressive stimulus measures this week. The Aussie trades 0.1 percent down at 0.5990, having hit a low of 0.5958 on Tuesday, it’s lowest since April 2003. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6130 (23.6% retracement of 0.6684 and 0.5958), a break above could take it near 0.6236 (38.2% retracement). On the downside, support is seen at 0.5925, a break below targets 0.5876.
NZD/USD: The New Zealand dollar consolidated near an 11-year trough hit in the prior session as domestic current account for the fourth quarter shrank less than $-2,956B expected to $-2657B over QOQ, while the ratio of Current Account to GDP recovered from -3.1 percent forecast to -3.0 percent. The Kiwi trades flat at 0.5938, having touched a low of 0.5915 on Tuesday, its lowest level since May 2009. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6041 (23.6% retracement 0.6447 and 0.5915), a break above could take it near 0.6118 (38.2% retracement). On the downside, support is seen at 0.5905, a break below could drag it below 0.5875.
Equities Recap
Asian shares declined as worries about the coronavirus pandemic dented hopes broad policy support would combat the economic fallout of the outbreak.
MSCI's broadest index of Asia-Pacific shares outside Japan traded 0.3 percent down.
Tokyo's Nikkei declined 1.7 percent to 16,726.55 points, Australia's S&P/ASX 200 index fell 6.4 percent to 4,953.20 points and South Korea's KOSPI slumped 4.8 percent to 1,591.20 points.
Shanghai composite index eased 1.8 percent to 2,728.76 points, while CSI 300 index traded 1.9 percent down at 3,636.26 points.
Hong Kong’s Hang Seng traded 6.6 percent lower at 22,408.42 points. Taiwan shares shed 2.3 percent to 9,218.67 points.
Commodities Recap
Crude oil prices steadied after slipping to fresh four-year lows earlier in the day, weighed down by fears for fuel demand and the global economy amid travel and social lockdowns triggered by the coronavirus epidemic. International benchmark Brent crude was trading 0.1 percent higher at $28.81 per barrel by 0523 GMT, having hit a low of $28.43 earlier, its lowest since Jan. 2016. U.S. West Texas Intermediate was trading 0.1 percent up at $26.25 a barrel, after falling as low as $26.25 earlier, its lowest since Feb. 2016.
Gold prices consolidated within narrow ranges as the U.S. Federal Reserve’s measures to boost liquidity in the market eased some concerns over disruptions to the global economy and a potential cash crunch due to the coronavirus outbreak. Spot gold trades flat at $1,528.44 per ounce by 0527 GMT, having touched a low of $1451.43 on Monday, its lowest since Nov. 26. U.S. gold futures gained 0.8 percent to $1,538 an ounce.
Treasuries Recap
The Japanese government bond prices dropped, with the benchmark 10-year JGB futures falling 0.81 point to 151.75. The key 10-year cash JGB yield gained 4.5 basis points to 0.050 percent, its highest since December 2018. In the superlong zone, the 20-year bond yield added 2.5 bps to 0.300 percent, the 30-year yield climbed 3.5 bps to 0.390 percent and the 40-year yield gained 2.5 bps to 0.375 percent. At the shorter end of the market, the five-year debt yield rose 3 bps to minus 0.075 percent, while the two-year yield gained 1.5 bps to minus 0.180 percent.
