Market Roundup
- Gold jumps 2 percent amid coronavirus fears
- Oil rises as U.S. ramps up economic support measures
Economic Data Ahead
- (0330 ET/0830 GMT) Germany Markit Manufacturing PMI (Mar) PREL
- (0330 ET/0830 GMT) Germany Markit Services PMI (Mar) PREL
- (0330 ET/0830 GMT) Germany Markit PMI Composite (Mar) PREL
- (0400 ET/0900 GMT) EZ Markit Manufacturing PMI (Mar) PREL
- (0400 ET/0900 GMT) EZ Markit Services PMI (Mar) PREL
- (0400 ET/0900 GMT) EZ Markit PMI Composite (Mar) PREL
- (0430 ET/0930 GMT) UK Markit Manufacturing PMI (Mar) PREL
- (0430 ET/0930 GMT) UK Markit Services PMI (Mar) PREL
Key Events Ahead
- N/A German Constitutional Court Ruling on ECB QE Legality
- (0430 ET/0930 GMT) UK FPC Meeting Minutes
FX Beat
DXY: The dollar index eased as the 10-year Bund yield declined 5 basis points to -0.39 percent, around 25 bps lower than last week’s 10-month highs. The greenback against a basket of currencies traded 0.9 percent down at 101.52, having touched a high of 102.99 on Friday, its highest since January 2017.
EUR/USD: The euro surged as investors assessed the impact of massive fiscal and monetary stimulus to contend with the impact from the coronavirus pandemic. The European currency traded 0.6 percent up at 1.0788, having touched a low of 1.0635 on Monday, its lowest since April 2017. Investors’ attention will remain on a series of data from the Eurozone economies and EZ prelim EZ Markit PMI's, ahead of the U.S. new home sales, Markit PMI's and Richmond Fed Manufacturing Index. Immediate resistance is located at 1.0838 (23.6% retracement of 1.1495 and 1.0635), a break above targets 1.0964 (38.2% retracement). On the downside, support is seen at 1.0691, a break below could drag it below 1.0635.
USD/JPY: The dollar eased, retreating from a 1-month peak hit in the prior session as a coronavirus economic stimulus package remained stalled in the U.S. Senate as lawmakers negotiated over its provisions. On Monday, the pair railed as high as 111.59 after the U.S. central bank rolled out an extraordinary array of programs and will lend against student loans, credit card loans, and U.S. government backed-loans to small businesses. The major was trading 0.8 percent down at 110.15, having hit a high of 111.59 on Monday, its highest since Feb. 24. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. new home sales, Markit PMI's and Richmond Fed Manufacturing Index. Immediate resistance is located at 111.68, a break above targets 112.22. On the downside, support is seen at 109.67 (5-DMA), a break below could take it near at 109.13 ( (23.6% retracement of 101.18 and 111.59).
GBP/USD: Sterling rose, reversing some of its previous session losses, as investors were impressed by the British policy response to the coronavirus pandemic. The Bank of England has slashed interest rates to record lows, ramped up its quantitative easing programme and the government announced significant fiscal stimulus. The major traded 0.8 percent higher at 1.1639, having hit a low of 1.1409 on Thursday, it’s lowest since 1985. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.1832 (23.6% retracement of 1.3200 and 1.1406), a break above could take it near 1.2093 (38.2% retracement). On the downside, support is seen at 1.1445, a break below targets 1.1410. Against the euro, the pound was trading up at 92.82 pence, having hit a low of 94.99 on Thursday, it’s lowest since Mar. 2009.
AUD/USD: The Australian dollar rose by more than 2 percent as the greenback came under heavy selling pressure on the Federal Reserve’s aggressive measures to confront disruptions to the economic activity. The Federal Reserve expanded its QE and said that will introduce a new program that will extend credit to small-and-medium-sized businesses. Moreover, the Fed said that it will be purchasing an additional $75 billion of treasuries and $50 billion of agency mortgage-backed-securities each day this week. The Aussie trades 2.3 percent up at 0.5955, having hit a low of 0.5506 on Thursday, it’s lowest since Oct. 2002. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6011 (10-DMA), a break above could take it near 0.6095 (50% retracement of 0.6684 and 0.5506). On the downside, support is seen at 0.5742, a break below targets 0.5663.
NZD/USD: The New Zealand dollar advanced, extending gains for the third straight session, after New Zealand's Finance Minister, Grant Robertson, said that the Reserve Bank of New Zealand can do more QE with different instruments. The Kiwi trades 1.8 percent up at 0.5816, having touched a low of 0.5469 on Thursday, its lowest level since March 2009. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.5843 (28.2% retracement 0.6447 and 0.5469), a break above could take it near 0.5958 (50% retracement). On the downside, support is seen at 0.5662, a break below could drag it below 0.5606.
Equities Recap
Asian shares bounced back as investors speculate the U.S Federal Reserve’s promise of unlimited dollar funding would ease painful strains in financial markets.
MSCI's broadest index of Asia-Pacific shares outside Japan surged 4.9 percent.
Tokyo's Nikkei surged 7.1 percent to 18,092.35 points, Australia's S&P/ASX 200 index rallied 4.2 percent to 4,735.70 points and South Korea's KOSPI advanced 8.6 percent to 1,609.97 points.
Shanghai composite index rose 2.3 percent to 2,722.44 points, while CSI 300 index traded 2.7 percent up at 3,625.11 points
Hong Kong’s Hang Seng traded 4.9 percent higher at 22,645.81 points. Taiwan shares added 4.5 percent to 9,285.62 points.
Commodities Recap
Crude oil prices rose on hopes that the United States will reach a deal soon on a $2 trillion coronavirus aid package which could blunt the economic impact of the outbreak. International benchmark Brent crude was trading 1.6 percent higher at $28.00 per barrel by 0520 GMT, having hit a low of $24.51 on Wednesday, its lowest since Sept. 2003. U.S. West Texas Intermediate was trading 2.1 percent up at $24.42 a barrel, after falling as low as $20.08 on Wednesday, its lowest since Feb. 2002.
Gold prices surged to a 1-1/2 week peak after the U.S. Federal Reserve’s unprecedented measures to help an economy reeling from the coronavirus pandemic halted a rush for cash. Spot gold rose 1.5 percent to $1,571.15 per ounce by 0523 GMT, having touched a low of $1451.43 last week, its lowest since Nov. 26. On Monday, the metal rose 3.7 percent, its highest percentage gain since June 2016. U.S. gold futures rose 1.5 percent to $1,590.50.
Treasuries Recap
The 10-year Bund yield last traded down 5 basis points to -0.39 percent, around 25 bps lower than last week’s 10-month highs.
