Asia Roundup: Antipodeans at 11-year low as oil plunges over 30 percent, greenback slumps as U.S. Treasury yields decline, Asian shares tumble on coronavirus panic - Monday, March 9th, 2020

Market Roundup

• Oil plunges about 30% after Saudi Arabia slashes prices
  
• Gold jumps past $1,700 level for first time in seven years
  
• Japan warns against yen spike

Economic Data Ahead

• (0430 ET/0930 GMT) EZ Sentix Investor Confidence (Mar)

Key Events Ahead

• No Significant Events Ahead

FX Beat

DXY: The dollar index tumbled to an over 1-year low, as panicked investors rushed to the safety of bonds, sending 30-year U.S. yields beneath 1 percent and 10-year yields under 0.5 percent. The greenback against a basket of currencies traded 0.9 percent down at 95.24, having touched a low of 94.88 earlier, its lowest since October 2018.

EUR/USD: The euro rallied by more than 1 percent to an over 1-year peak as the greenback plunged after the yield on 10-year U.S. Treasuries went under 0.5 percent for the first time. The European currency traded 1.0 percent up at 1.1398, having touched a high of 1.1495 earlier, its highest since January 2019. Investors’ attention will remain on a series of data from the Eurozone economies and EZ Sentix investor confidence, amid a lack of economic data from the U.S. docket. Immediate resistance is located at 1.1500, a break above targets 1.1540. On the downside, support is seen at 1.1301, a break below could drag it below 1.1268.

USD/JPY: The dollar plunged by 3 percent to an over 3-year low as U.S. treasury yields dropped and the number of people infected with the coronavirus topped 107,000 across the world. The selling pressure around the pair intensified after the oil prices collapsed by more than 30 percent as Saudi Arabia, the world’s top exporter, vowed to cut prices and raise its production significantly. However, the yen trimmed gains after Japan’s finance minister warned against investors pushing up the yen rapidly, saying the government will closely watch market moves. The major was trading 2.5 percent down at 102.68, having hit a low of 101.54 earlier, its lowest since November 16. Investors’ will continue to track the broad-based market sentiment, as U.S. economic calendar remains absolutely data empty. Immediate resistance is located at 105.06 (50% retracement of 108.57 and 101.54), a break above targets 105.89 (61.8% retracement). On the downside, support is seen at 101.17, a break below could take it near at 100.67.

GBP/USD: Sterling surged to a 5-week peak, boosted by a broadly weaker dollar and comments from the European Union’s chief Brexit negotiator that a trade deal between Britain and the bloc was still possible this year. Last week Britain and the EU concluded their first round of trade talks since Britain left the bloc and are due to reconvene on March 18. The major traded 0.1 percent higher at 1.3054, having hit a high of 1.3125 earlier, it’s highest since Feb. 3. Investors’ attention will remain on the trade negotiations and geopolitical developments. Immediate resistance is located at 1.3138, a break above could take it near 1.3172. On the downside, support is seen at 1.3016, a break below targets 1.2982. Against the euro, the pound was trading 0.9 percent down at 87.30 pence, having hit a low of 87.66 earlier, it’s lowest since Oct. 14.

AUD/USD: The Australian dollar declined to an 11-year low, weighed down by a slump in oil prices and coronavirus fears. Oil prices collapsed 30 percent after Saudi Arabia surprised markets with a pledge to slash prices and boost production following the collapse of an OPEC supply agreement. The Aussie trades 1.5 percent down at 0.6547, having hit a low of 0.6314 earlier, it’s lowest since March 2009. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6653, a break above could take it near 0.6694. On the downside, support is seen at 0.6519 (61.8% retracement of 0.6433 and 0.6657), a break below targets 0.6481 (78.6% retracement).

NZD/USD: The New Zealand dollar slumped to a near 11-year trough on news that Saudi Arabia is attempting to punish Russia for not agreeing to production cuts proposed by the Organization of the Petroleum Exporting Countries. The Kiwi trades 1.3 percent down at 0.6274, having touched a low of 0.6008 earlier, its lowest level since May 2009. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6401, a break above could take it near 0.6447. On the downside, support is seen at 0.6260 (61.8% retracement of 0.6191 and 0.6372), a break below could drag it below 0.6230 (78.6% retracement).

Equities Recap

Asian shares plunged as the economic shock of the coronavirus sent investors seeking safety in safe-haven assets, while oil plunged more than 30 percent after Saudi Arabia slashed its official selling price.

MSCI's broadest index of Asia-Pacific shares outside Japan dropped 1.2 percent.

Tokyo's Nikkei declined 5.1 percent to 19,698.76 points, Australia's S&P/ASX 200 index slumped 7.3 percent to 5,760.60 points and South Korea's KOSPI tumbled 4.2 percent to 1,954.77 points.

Shanghai composite index fell 3.01 percent to 2,943.50 points, while CSI 300 index traded 3.4 percent down at 3,996.31 points.

Hong Kong’s Hang Seng traded 3.3 percent lower at 25,172.22 points. Taiwan shares shed 3.1 percent to 10,977.64 points

Commodities Recap

Crude oil prices slumped by 30 percent after Saudi Arabia started a price war with Russia by slashing its selling prices and pledging to increase its supply. International benchmark Brent crude was trading 28.49 percent lower at $32.54 per barrel by 0533 GMT, having hit a low of $31.26 earlier, its lowest since Feb. 2016. U.S. West Texas Intermediate was trading 31.1 percent down at $28.60 a barrel, after falling as low as $27.40 last week, its lowest since Feb. 2016.

Gold prices edged lower after rising above the $1,700 per ounce level for the first time since late 2012 on a widening coronavirus outbreak and a plunge in crude oil. Spot gold was trading 0.7 percent down at $1,661.24 per ounce by 0542 GMT, having touched a high of $1703.28 earlier in the session, its highest since December 2012. U.S. gold futures jumped 1.6 percent to $1,699.70 per ounce.

Treasuries Recap

The yield on 10-year Treasuries dropped 24 basis points to 0.53 percent; 30-year yield was down 30 basis points at 0.98 percent.

The Australian 10-year yield retreated about six basis points to 0.62 percent.