Market Roundup
- U.S. oil falls to lowest since 1999
- Gold slips as dollar firms
- China cuts benchmark rate for second time this year
- New Zealand inflation rises 0.8% in Q1
Economic Data Ahead
- (0400 ET/0800 GMT) EZ Current Account n.s.a(Feb)
- (0400 ET/0800 GMT) EZ Current Account s.a(Feb)
- (0500 ET/0900 GMT) EZ Trade Balance n.s.a.(Feb)
- (0400 ET/0800 GMT) EZ Trade Balance s.a.(Feb)
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index rose, reversing most of its previous session losses, as investors braced for more dire news on the fallout from the coronavirus and governments across the globe moved cautiously toward an economic re-start. The greenback against a basket of currencies traded 0.3 percent up at 100.05, having touched a high of 100.30 on Thursday, its highest since Apr. 8.
EUR/USD: The euro surged after Italian Prime Minister Giuseppe Conte repeatedly called for the European Union to issue common eurozone bonds to demonstrate the bloc’s solidarity in tackling the coronavirus crisis. The European currency traded 0.1 percent up at 1.0863, having touched a low of 1.0812 on Friday, its lowest since April 7. Investors’ attention will remain on a series of economic data from the Eurozone economies, EZ current account and trade balance, ahead of the Chicago Fed National Activity Index released by Federal Reserve Bank of Chicago. Immediate resistance is located at 1.0890 (10-DMA), a break above targets 1.0919. On the downside, support is seen at 1.0841, a break below could drag it below 1.0806.
USD/JPY: The Japanese yen declined after data showed Japan’s exports fell 11.7 percent in March from a year earlier, reflecting a sharp fall in external demand due to the outbreak. Moreover, hopes that the U.S. economy might reopen soon supported the bid tone around the dollar. The major was trading 0.3 percent up at 107.84, having hit a low of 106.92 on Wednesday, its lowest since Apr. 1. Investors’ will continue to track the broad-based market sentiment, ahead of the Chicago Fed National Activity Index. Immediate resistance is located at 108.13 (10-DMA), a break above targets 108.42. On the downside, support is seen at 107.21, a break below could take it near at 106.92.
GBP/USD: Sterling slumped below the 1.2500 handle after a senior minister on Sunday stated that Britain is not considering lifting its lockdown. The recent data show 16,060 people have died in British hospitals after testing positive for the novel coronavirus, a rise of 596 from data published on Saturday. The major traded 0.3 percent down at 1.2459, having hit a low of 1.2406 on Friday, it’s lowest since April 9. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2536, a break above could take it near 1.2580. On the downside, support is seen at 1.2420, a break below targets 1.2392. Against the euro, the pound was trading 0.3 percent down at 87.14 pence, having hit a high of 86.81 on Tuesday, it’s highest since Mar. 10.
AUD/USD: The Australian dollar declined as caution gripped markets over the economic fallout from the coronavirus. The pair is likely to remain on the downside as U.S. oil fell more than 10 percent to its lowest level since 1999 on weak fuel consumption and grim forecasts from the OPEC and the International Energy Agency. China slashed its benchmark lending rate as expected to reduce borrowing costs for companies and support the economy. The Aussie trades 0.3 percent down at 0.6336, having hit a low of 0.6263 on Thursday, it’s lowest since Apr. 9. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6381, a break above could take it near 0.6429. On the downside, support is seen at 0.6299(10-DMA), a break below targets 0.6262.
NZD/USD: The New Zealand dollar rallied, extending previous session gains after data showed the economy's consumer price index rose 0.8 percent in the first quarter compared to 0.5 percent in the previous quarter, beating analyst and central bank estimates. While New Zealand's annual inflation was at 2.5 percent compared to 1.9 percent in the previous year period, the highest since the September 2011 quarter. The Kiwi trades 0.1 percent up at 0.6032, having touched a high of 0.6130 on Tuesday, its highest level since March 16. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6073, a break above could take it near 0.6103. On the downside, support is seen at 0.5980, a break below could drag it below 0.5952.
Equities Recap
Asian shares declined after a Reuters tally on Sunday showed cases of the virus have crossed 2.33 million globally and 159,818 people have died.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.2 percent.
Tokyo's Nikkei eased 1.2 percent to 19,669.12 points, Australia's S&P/ASX 200 index declined 2.5 percent to 5,353.00 points and South Korea's KOSPI fell 1.1 percent to 1,893.59 points.
Shanghai composite index rose 0.4 percent to 2,849.08 points, while CSI 300 index traded 0.3 percent up at 3,850.06 points.
Hong Kong’s Hang Seng traded 0.1 percent lower at 24,346.05 points. Taiwan shares shed 0.1 percent to 10,586.71 points.
Commodities Recap
Crude oil prices plunged on the back of sliding demand and concerns that U.S. storage facilities will soon fill to the brim amid the coronavirus pandemic. International benchmark Brent crude was trading 2.6 percent lower at $27.56 per barrel by 0522 GMT, having hit a low of $26.94 earlier, its lowest since April 2. U.S. West Texas Intermediate was trading 18.20 percent down at $15.05 a barrel, after falling as low as $14.67 earlier, its lowest since March 1999.
Gold prices slumped to a more than 1-week low, weighed down by a firmer dollar amid doubts over the United States’ plans to reopen the economy as the novel coronavirus pandemic showed no signs of easing. Spot gold eased 0.05 percent to $1,682.75 per ounce by 0527 GMT, having touched a low of $1,671.21 earlier, its lowest since Apr. 9. U.S. gold futures slipped 0.2 percent to $1,695.20.
Treasuries Recap
The Japanese government bond futures fell slightly, withe the benchmark 10-year JGB futures falling 0.10 point to 152.07. The 10-year JGB yield was unchanged at 0.010 percent. The 20-year JGB yield was flat at 0.360 percent. The 30-year JGB yield was also flat at 0.495 percent. In the middle of the yield curve, the five-year yield rose 1 basis point to minus 0.095 percent. At the short end of the curve, the two-year JGB yield was unchanged at minus 0.145 percent.
