Market Roundup
- Gold rises amid jump in new virus cases
- Coronavirus likely to hurt euro zone, UK growth - S&P Global
- RBNZ governor Orr: Coronavirus poses downside risks to outlook
Economic Data Ahead
- (0200 ET/0700 GMT) German Consumer Price Index (YoY) (Jan)
- (0200 ET/0700 GMT) German Consumer Price Index (MoM) (Jan)
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index held firm near a 4-month peak hit in the previous session after U.S. Federal Reserve Chair Jerome Powell reiterated his confidence in the U.S. economic outlook, even as he said he expected some drag soon from China’s new coronavirus epidemic. The greenback against a basket of currencies traded flat at 99.02, having touched a high of 99.05 on Wednesday, its highest since Oct. 10.
EUR/USD: The euro slumped to a near 3-year low after credit rating agency S&P Global estimated that the likely slowdown in China’s economy due to the coronavirus outbreak is likely to shave 0.1 to 0.2 percentage points off both eurozone and UK growth this year. The European currency traded 0.05 percent down at 1.0869, having touched a low of 1.0865 earlier, its lowest since May 2017. Investors’ attention will remain on German consumer price index, ahead of the U.S. unemployment benefit claims and consumer price index. Immediate resistance is located at 1.0924 (5-DMA), a break above targets 1.0957. On the downside, support is seen at 1.0852, a break below could drag it below 1.0839.
USD/JPY: The dollar plunged from an over 3-week peak after the Chinese province of Hubei reported a record rise in the death toll today, as global health experts warned the epidemic could get far worse before it is brought under control. The major was trading 0.2 percent down at 109.88, having hit a high of 110.13 on Wednesday, its highest since Jan. 21. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims and consumer price index. Immediate resistance is located at 110.17, a break above targets 110.30. On the downside, support is seen at 109.55 (21-DMA), a break below could take it near at 109.35.
GBP/USD: Sterling eased, halting a 3-day rally, as investors remain anxious over British Prime Minister Boris Johnson’s hard-line in trade talks with the European Union. The major traded 0.05 percent down at 1.2952, having hit a low of 1.2872 on Monday, it’s lowest since Nov. 27. Investors’ attention will remain on the trade negotiations, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2995 (10-DMA), a break above could take it near 1.3027 (21-DMA). On the downside, support is seen at 1.2921, a break below targets 1.2894. Against the euro, the pound was trading flat at 83.98 pence, having hit a high of 83.88 on Wednesday, it’s highest since Dec.17.
AUD/USD: The Australian dollar declined as the latest update on the spread of the virus stoked fears that the epidemic remains a potent threat to the global economic outlook. The Aussie trades 0.3 percent down at 0.6716, having hit a low of 0.6662 last week, it’s lowest since March 2009. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6682, a break below targets 0.6635. On the upside, resistance is located at 0.6750, a break above could take it near 0.6774.
NZD/USD: The New Zealand dollar tumbled after rising for two consecutive sessions, after Reserve Bank of New Zealand's governor, Adrian Orr, stated that Coronavirus poses downside risks to the outlook and it will have an impact on monetary policy if outbreak lasts for a sustained period. The Kiwi trades 0.2 percent down at 0.6448, having touched a low of 0.6378 on Tuesday, its lowest level since November 15. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6484, a break above could take it near 0.6503. On the downside, support is seen at 0.6381, a break below could drag it below 0.6358.
Equities Recap
Asian shares declined as the number of new coronavirus cases and deaths in the outbreak's epicenter increased.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.1 percent.
Tokyo's Nikkei declined 0.2 percent to 23,808.38 points, Australia's S&P/ASX 200 index rallied 0.2 percent to 7,103.20 points and South Korea's KOSPI tumbled 0.2 percent to 2,234.91 points.
Shanghai composite index fell 0.7 percent to 2,907.05 points, while CSI 300 index traded 0.6 percent down at 3,959.46 points.
Hong Kong’s Hang Seng traded 0.3 percent lower at 27,755.70 points. Taiwan shares added 0.2 percent to 11,794.09 points
Commodities Recap
Crude oil prices eased, halting a 2-day rally, dragged down by a slump in demand caused by the coronavirus outbreak in China. International benchmark Brent crude was trading 0.7 percent lower at $55.86 per barrel by 0419 GMT, having hit a low of $53.09 on Monday, its lowest since Jan 2019. U.S. West Texas Intermediate was trading 0.5 percent down at $51.37 a barrel, after falling as low as $49.46 on Monday, its lowest since Feb. 4.
Gold prices surged after tumbling for two straight sessions as investors sought the safety of safe haven assets after a sharp jump in the death toll and infections from a coronavirus epidemic in China. Spot gold was trading 0.5 percent up at $1,572.78 per ounce by 0421 GMT, having touched a high of $1577.05 on Monday, its highest since Feb. 4. U.S. gold futures edged higher by 0.2 pecent to $1,574.90.
Treasuries Recap
The Australian 3-year bond futures stood at 99.255 and well off a recent peak at 99.455. The 10-year contract was steady at 98.9250, implying an yield of 1.075 percent.
