Europe Roundup: Sterling falls as investors seek safety in dollars, European shares slump, Gold dips, Oil extends fall as coronavirus shutdowns sap demand-March 23rd,2020

Market Roundup

• UK Feb Steel Production (Metric Ton)      585.60K, 657.50K previous

• Canada Jan Wholesale Sales (MoM) 1.8%,-0.2% forecast,0.9% previous

• US Feb Chicago Fed National Activity  -0.25 previous

Looking Ahead - Economic Data (GMT) 
   
• 14:00 French 12-Month BTF Auction -0.625% previous

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• 14:00 French 6-Month BTF Auction -0.615% previous

• 15:00  US March Consumer Confidence -14.2, -6.6 previous

• 15:30    Brazil Federal Tax Revenue 174.99B previous

• 15:30    Brazil CAGED Net Payroll Jobs 70.00K, -307.31K previous

Looking Ahead - Economic events and other releases (GMT)"

• No significant events  
     
Fx Beat

EUR/USD: The euro edged higher against the U.S. dollar on Monday, as investors assessed the impact of massive fiscal and monetary stimulus in the face of coronavirus. A rising tide of national lockdowns and restrictions on travel and daily life has heightened fears of a deep recession, overshadowing efforts by policymakers to soften the blow. Despite recent easing measures by the U.S. Federal Reserve, the dollar has maintained its strength as the uncertainty around the virus spread and its impact has accelerated the flight to cash and pushed investors to liquidate holdings across asset classes. The euro was last up 0.73 percent at $1.0776. Immediate resistance can be seen at 1.0816 (50% Fib), an upside break can trigger rise towards 1.0857(61.8 % fib).On the downside, immediate support is seen at 1.0729 (23.6% DMA), a break below could take the pair towards 1.0650 (23rd may low).

GBP/USD: Sterling edged lower against dollar on Monday as investors rushed to buy the U.S. dollar amid another round of panic about the economic hit from the coronavirus crisis.Sterling has been under pressure because of a massive wave of selling of most currencies other than the dollar, which is the world’s most liquid currency and the safe haven of choice when confidence evaporates from financial markets.But the pound has also been hit by investor concerns that Britain’s approach in dealing with the virus, which has seen a more staggered disruption to economic and everyday life than in other countries, is not the right one. Immediate resistance can be seen at 1.1682 (50% fib ), an upside break can trigger rise towards 1.1724 (5 DMA) .On the downside, immediate support is seen at 1.1571 (38.2%fib), a break below could take the pair towards 1.1407 (23.6% fib).

USD/CHF: The dollar declined against the Swiss franc on Monday  after Swiss National Bank hiked its foreign currency interventions to their highest level since the Brexit referendum in 2016, data on Monday indicated, showing the central bank’s determination to counter the Swiss franc’s coronavirus-driven rise.Swiss sight deposits rose by nearly 6 billion Swiss francs last week, supporting the SNB’s statement it is escalating its currency market interventions to slow the rise of the safe-haven currency. At (GMT 12:08), Greenback fell 0.20% versus the Swiss franc to 0.9653. Immediate resistance can be seen at 0.9696 (5 DMA), an upside break can trigger rise towards 0.9742 (21 DMA).On the downside, immediate support is seen at 0.9796 (23rd March low), a break below could take the pair towards 0.9762 (5 DMA).

USD/JPY: The dollar edged lower against the Japanese yen on Monday, as  a rising tide of national lockdowns threatened to overwhelm policymakers’ frantic efforts to cushion what is likely to be a deep global recession. The U.S. Federal Reserve continued to roll out emergency support on Friday as it enhanced efforts with other major central banks to ease a global dollar-funding crunch.Market participants are counting on further policy easing in the next few days as the U.S. Senate mulls a $1 trillion package that would include direct financial help for Americans. Strong resistance can be seen at 110.59 (38.2% fib), an upside break can trigger rise towards 111.25 (23.6% fib).On the downside, immediate support is seen at 109.50 (61.8% fib), a break below could take the pair towards 109.00 (Psychological level). 

Equities Recap

European stock index futures fell to near eight-year lows on Monday after several countries expanded measures to curtail the spread of the coronavirus pandemic, with Italy banning even domestic travel as the number of fatalities there topped 5,400.    

At (GMT 13:20),UK's benchmark FTSE 100 was last trading higher at 1.74 percent, Germany's Dax was down by 0.81 percent, France’s CAC was last down by 0.81 percent.

Treasuries Recap

The euro area’s bond markets steadied on Monday after days of heightened volatility and wild swings, as investors assessed the impact of massive fiscal and monetary stimulus in the face of coronavirus.

The 10-year Bund yield last traded down 5 basis points on the day at around -0.39%, more than 20 bps lower from last week’s 10-month highs.

Commodities Recap

Gold fell on Monday as investors unloaded bullion in exchange for cash after several more countries announced lockdowns to curtail the spread of the coronavirus, overshadowing policymakers’ frantic efforts to cushion the economic impact.

Spot gold was down 0.2% at $1,494.29 an ounce by 1156 GMT, having risen nearly 2% in the previous session. U.S. gold futures rose 0.9% to $1,497.60.

Brent crude prices extended falls on Monday amid more action by governments to contain the global coronavirus outbreak that has slashed the demand outlook for oil and threatened a worldwide economic contraction.

Brent crude futures fell 65 cents, or 2.4%, to $26.33 a barrel by 0328 GMT. West Texas Intermediate (WTI) crude  futures were up 29 cents, or 1.3%, at $22.92 a barrel, having fallen 2 percentage points more than Brent this year.