Market Roundup
- Oil prices slip as demand shrinks
- ECB's Lagarde asked EZ ministers to consider one-off 'coronabonds' issue
Economic Data Ahead
- (0500 ET/0900 GMT) EZ Private Loans (YoY) (Feb)
- (0500 ET/0900 GMT) EZ M3 Money Supply (3m) (Feb)
- (0500 ET/0900 GMT) EZ Economic Bulletin
- (0500 ET/0900 GMT) EZ M3 Money Supply (YoY) (Feb)
Key Events Ahead
- N/A G20 Meeting
- (0800 ET/1200 GMT) Bank of England Minutes
- (0800 ET/1200 GMT) BoE Interest Rate Decision
FX Beat
DXY: The dollar index slumped to a 1-week low after the U.S. Senate approved a $2 trillion emergency package on Wednesday, and U.S. President Donald Trump is expected to sign the bill into law following a vote in the House of Representatives on Friday. The greenback against a basket of currencies traded 0.1 percent down at 100.88, having touched a high of 102.99 on Friday, its highest since January 2017.
EUR/USD: The euro rallied to a 1-week peak after four officials stated that European Central Bank chief Christine Lagarde asked eurozone finance ministers during a videoconference to consider a one-off joint debt issue of “coronabonds” to help combat the coronavirus pandemic. The European currency traded 0.3 percent up at 1.0912, having touched a high of 1.0933 earlier, its highest since March 19. Investors’ attention will remain on a series of data from the Eurozone economies, EZ economic bulletin and M3 money supply, ahead of the U.S. goods trade balance, gross domestic product, unemployment benefit claims, personal consumption expenditure and wholesale inventories. Immediate resistance is located at 1.0964 (38.2% retracement of 1.1495 and 1.0635), a break above targets 1.1048 (21-DMA). On the downside, support is seen at 1.0830, a break below could drag it below 1.0756.
USD/JPY: The dollar declined ahead of U.S. data due to be released later in the day that is likely to show U.S. weekly unemployment benefit claims rose to around a million as firms lay off workers due to the rapid spread of the coronavirus. The major was trading 0.5 percent up at 110.64, having hit a high of 111.71 on Tuesday, its highest since Feb. 24. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. goods trade balance, gross domestic product, unemployment benefit claims, personal consumption expenditure and wholesale inventories. Immediate resistance is located at 111.77, a break above targets 112.22. On the downside, support is seen at 110.08, a break below could take it near at 109.66 / 109.22 ( (23.6% retracement of 101.18 and 111.71).
GBP/USD: Sterling eased after rising to a 1-week peak in the prior session on the back of a broad-based weaker dollar and rallying stock markets. Investors now await Bank of England policy meeting due later in the day for clues about possible future rate adjustments. The BoE cut interest rates to a record low of 0.1 percent last week; the second rate cut this month. The major traded 0.5 percent lower at 1.1825, having hit a low of 1.1409 last week, 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 1.2001, a break above could take it near 1.2093 (38.2% retracement of 1.3200 and 1.1406). On the downside, support is seen at 1.1663 (5-DMA), a break below targets 1.1540. Against the euro, the pound was trading 0.7 percent down at 92.15 pence, having hit a low of 94.99 on Thursday, it’s lowest since Mar. 2009.
AUD/USD: The Australian dollar fell, drifting away from a 1-week peak recorded in the previous session, as nervous investors liquidated positions in favor of holding their money in cash deposits. The Aussie trades 0.5 percent down at 0.5926, having hit a low of 0.5506 last week, 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 0.6095 (50% retracement of 0.6684 and 0.5506), a break above could take it near 0.6234 (61.8% Fib). On the downside, support is seen at 0.5857 (5-DMA), a break below targets 0.5825.
Equities Recap
Asian shares traded in a volatile market as investors seemed divided between relief at the agreement of the U.S. stimulus package and dread over a likely rise in jobless claims and coronavirus cases.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.3 percent.
Tokyo's Nikkei plunged 4.5 percent to 18,664.60 points, Australia's S&P/ASX 200 index rallied 2.3 percent to 5,113.30 points and South Korea's KOSPI fell 1.1 percent to 1,686.24 points.
Shanghai composite index declined 0.6 percent to 2,764.91 points, while CSI 300 index traded 0.7 percent down at 3,698.05 points
Hong Kong’s Hang Seng traded 0.9 percent lower at 23,300.33 points. Taiwan shares added 0.9 percent to 9,736.36 points.
Commodities Recap
Crude oil prices eased as the prospect of rapidly dwindling demand due to coronavirus travel bans and lockdowns offset hopes a U.S. $2 trillion emergency stimulus will shore up economic activity. International benchmark Brent crude was trading 0.8 percent lower at $27.22 per barrel by 0543 GMT, having hit a low of $24.51 last week, its lowest since Sept. 2003. U.S. West Texas Intermediate was trading 0.5 percent down at $24.12 a barrel, after falling as low as $20.08 last week, its lowest since Feb. 2002
Gold prices declined as investors rushed for liquid cash while awaiting the passage of a $2 trillion dollar U.S. stimulus package to combat the economic impact of the coronavirus epidemic. Spot gold eased 0.9 percent to $1,603.18 per ounce by 0545 GMT, having touched a high of $1640.35 on Wednesday, its highest since Mar. 12. U.S. gold futures were up 0.3 percent at $1,639 an ounce.
Treasuries Recap
On Wednesday, the benchmark 10-year yield was up 5.4 basis points at 0.874 percent, the 30-year yield was 8.1 basis points higher at 1.458 percent, and the two-year yield was 4.2 basis points lower at 0.334 percent.
