Market Roundup
- Crude oil drops as pandemic darkens demand outlook
- U.S. House passes $2.2 trillion coronavirus bill
- PBoC cuts interest rate, injects $7 billion into banking system
Economic Data Ahead
- (0430 ET/0830 GMT) UK Net Lending to Individuals (MoM) (Feb)
- (0430 ET/0830 GMT) UK Consumer Credit (Feb)
- (0430 ET/0830 GMT) UK M4 Money Supply (MoM) (Feb)
- (0430 ET/0830 GMT) UK M4 Money Supply (YoY) (Feb)
- (0430 ET/0830 GMT) UK Mortgage Approvals (Feb)
- (0500 ET/0900 GMT) EZ Services Sentiment (Mar)
- (0500 ET/0900 GMT) EZ Consumer Confidence (Mar)
- (0500 ET/0900 GMT) EZ Industrial Confidence (Mar)
- (0500 ET/0900 GMT) EZ Business Climate (Mar)
- (0500 ET/0900 GMT) EZ Economic Sentiment Indicator (Mar)
- (0800 ET/1200 GMT) Germany Consumer Price Index (YoY) (Mar) PREL
- (0800 ET/1200 GMT) Germany Consumer Price Index (MoM) (Mar) PREL
- (0800 ET/1200 GMT) Germany Harmonized Index of Consumer Prices (YoY) (Mar) PREL
- (0800 ET/1200 GMT) Germany Harmonized Index of Consumer Prices (MoM) (Mar) PREL
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index retreated from a near 2-week low after the U.S. House of Representatives on Friday approved a $2.2 trillion aid package to curb the economic fallout from the coronavirus pandemic. U.S. President Donald Trump on Sunday extended guidelines for social restrictions to April 30. The greenback against a basket of currencies traded 0.5 percent up at 98.83, having touched a low of 98.27 on Friday, its lowest since Mar. 17.
EUR/USD: The euro plunged from a 1-1/2 week peak as the greenback rebounded after the U.S. House of Representatives on Friday approved a $2.2 trillion aid package to help cope with the virus-inflicted economic downturn. The European currency traded 0.3 percent down at 1.1099, having touched a high of 1.1147 on Friday, its highest since March 17. Investors’ attention will remain on a series of data from the Eurozone economies, EZ economic sentiment indicator and German prelim consumer price index, ahead of the U.S. pending home sales and Dallas Fed manufacturing business index. Immediate resistance is located at 1.1166 (61.8% retracement of 1.1495 and 1.0635), a break above targets 1.1221. On the downside, support is seen at 1.1061 (21-DMA), a break below could drag it below 1.0996.
USD/JPY: The dollar declined to a near 2-week low earlier in the session as investors digested data that showed U.S. consumer sentiment dropped to near a 3-1/2-year low in March. However, the major trimmed losses after the top U.S. House of Representatives Republican said on Sunday that a fourth economic stimulus package to try to curb the economic fallout from the coronavirus pandemic may not be necessary. The major was trading 0.2 percent down at 107.71, having hit a low of 107.12 earlier, its lowest since Mar. 18. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. pending home sales and Dallas Fed manufacturing business index. Immediate resistance is located at 108.50, a break above targets 109.22. On the downside, support is seen at 106.75, a break below could take it near at 106.09.
GBP/USD: Sterling nudged lower from a 2-week peak as the greenback gained after the U.S. government approved $2.2 trillion in fiscal stimulus and the Federal Reserve injected more dollars into the financial market by buying U.S. government bonds. The major traded 0.5 percent lower at 1.2384, having hit a high of 1.2485 on Friday, it’s highest since March 13. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2516 (61.8% retracement of 1.3200 and 1.1406), a break above could take it near 1.2600. On the downside, support is seen at 1.2277, a break below targets 1.2202. Against the euro, the pound was trading 0.05 percent down at 89.37 pence, having hit a high of 89.04 last week, it’s highest since Mar. 13.
AUD/USD: The Australian dollar eased from a 2-week peak and halted a 6-day winning streak as the People's Bank of China's rate cut and the liquidity injection failed to boost investor risk sentiment, while coronavirus lockdowns stoked fears of economic damage. The PBoC cut the seven-day reverse repo rate to 2.2 percent from 2.4 percent and injected 50 billion yuan or $7 billion into the banking system. The Aussie trades 0.5 percent down at 0.6132, having hit a high of 0.6200 on Friday, it’s highest since Mar. 16. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6234 (61.8% retracement of 0.6684 and 0.5506), a break above could take it near 0.6302. On the downside, support is seen at 0.5993 (5-DMA), a break below targets 0.5940 (10-DMA).
Equities Recap
Asian shares declined as fears mounted that the global coronavirus shutdown could last for months.
MSCI's broadest index of Asia-Pacific shares outside Japan eased.
Tokyo's Nikkei plunged 1.6 percent to 19,084.97 points, Australia's S&P/ASX 200 index rose 7.0 percent to 5,181.40 points and South Korea's KOSPI fell 0.05 percent to 1,717.12 points.
Shanghai composite index eased 0.9 percent to 2,747.21 points, while CSI 300 index traded 0.9 percent down at 3,674.11 points
Hong Kong’s Hang Seng traded 1.2 percent lower at 23,218.59 points. Taiwan shares shed 0.7 percent to 9,629.43 points.
Commodities Recap
Crude oil prices plunged to multi-year lows as the global coronavirus pandemic worsened and the Saudi Arabia-Russia price war showed no signs of abating. International benchmark Brent crude was trading 5.5 percent lower at $23.56 per barrel by 0540 GMT, having hit a low of $23.14 earlier, its lowest since April 2003. U.S. West Texas Intermediate was trading 5.1 percent down at $26.68 a barrel, after falling as low as $19.95 earlier, its lowest since Feb. 2002.
Gold prices declined, extending previous session losses as the U.S dollar hovered near a 2-week low touched in the previous session, meanwhile coronavirus lockdowns tightened across the world and stoked fears of economic damage. Spot gold was trading 0.6 percent down at $1,613.15 per ounce by 0549 GMT, having touched a high of $1644.43 on Thursday, its highest since Mar. 12. U.S. gold futures rose 1 percent to $1,641.80.
Treasuries Recap
The Japanese government bond prices gained, with the benchmark 10-year JGB futures rising 0.43 point to 152.77. The 10-year JGB yield fell 0.5 basis point to minus 0.005 percent, dipping to negative levels for the first time in about two weeks. The 20-year JGB yield fell 1 basis point to 0.285 percent, while the 30-year JGB yield fell 2 basis points to 0.400 percent. The 40-year JGB yield fell 3.5 basis points to 0.410 percent.
