Asia Roundup: Antipodeans decline as coronavirus cases rise, greenback rebounds on possible fiscal stimulus, investors eye EZ GDP figures - Tuesday, March 10th, 2020

Market Roundup

• Oil prices jump 6% after biggest one-day fall since 1991
  
• Gold falls 1% on global stimulus hopes
  
• Mainland China reports 19 new confirmed cases of coronavirus

Economic Data Ahead

• (0500 ET/1000 GMT) EZ Employment Change (YoY) (Q4)
  
• (0500 ET/1000 GMT) EZ Employment Change (QoQ) (Q4)
  
• (0500 ET/1000 GMT) EZ Gross Domestic Product s.a. (QoQ) (Q4)
  
• (0500 ET/1000 GMT) EZ Gross Domestic Product s.a. (YoY) (Q4)
  

Key Events Ahead

• No Significant Events Scheduled

FX Beat

DXY: The dollar index bounced back from an over 1-year low after U.S. Treasury Secretary Steve Mnuchin said the White House will meet with bank executives this week in a sign the U.S. government is preparing to roll out more measures to soften the blow from the spread of coronavirus. The greenback against a basket of currencies traded 0.8 percent up at 95.85, having touched a low of 94.65 on Monday, its lowest since September 27, 2018.

EUR/USD: The euro eased, retreating from an over 1-year peak hit in the prior session as the greenback attempted a recovery across the board following yesterday's heavy selling. Moreover, investors digested data that showed investor morale in the euro zone plummeted in March to its lowest level since April 2013 as the coronavirus epidemic raised the prospect of a long period of economic weakness. The European Central Bank meets on Thursday and will be under intense pressure to act, even though rates there are already deeply negative. The European currency traded 0.8 percent down at 1.1341, having touched a high of 1.1495 on Monday, its highest since January 2019. Investors’ attention will remain on a series of data from the Eurozone economies, EZ employment change and gross domestic product, 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 1.1252 (5-DMA).

USD/JPY: The dollar recovered some ground after tumbling to an over 3-year low in the prior session, supported by hopes for U.S. economic stimulus and a bounce in Treasury yields. U.S. President Donald Trump stated that the White House will hold a news conference today about economic measures in response to the coronavirus outbreak. The major was trading 2.2 percent up at 104.63, having hit a low of 101.18 on Monday, its lowest since October 2016. Investors’ will continue to track the broad-based market sentiment, as U.S. economic calendar remains absolutely data empty. Immediate resistance is located at 105.75 (61.8% retracement of 108.57 and 101.18), a break above targets 106.99 (78.6% retracement). On the downside, support is seen at 101.54, a break below could take it near at 101.17.

GBP/USD: Sterling declined from a 1-1/2 month peak as the greenback rebounded after U.S. stock futures opened higher and Treasury yields climbed off record lows. Money markets in Britain now price in a rate cut of nearly 50 basis points when the central bank meets on March 26, as coronavirus fears roil world markets. The major traded 0.6 percent lower at 1.3022, having hit a high of 1.3200 on Monday, it’s highest since Jan. 31. Investors’ attention will remain on the trade negotiations and geopolitical developments. Immediate resistance is located at 1.3172, a break above could take it near 1.3205. On the downside, support is seen at 1.3001, a break below targets 1.2959 (5-DMA). Against the euro, the pound was trading 0.1 percent up at 87.00 pence, having hit a low of 87.66 on Monday, it’s lowest since Oct. 14.

AUD/USD: The Australian dollar declined, extending previous session losses, as investors counted the mounting economic costs of a global coronavirus epidemic. The number of people infected with the virus topped 110,000 across the world as the outbreak reached more countries and caused more economic damage. The Aussie trades 0.6 percent down at 0.6546, having hit a low of 0.6314 on Monday, 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 0.6633 (21-DMA), 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 plunged amid mounting concerns over the global spread of the virus. The Kiwi trades 0.7 percent down at 0.6294, having touched a low of 0.6008 on Monday, 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 0.6281 (50% retracement of 0.6191 and 0.6372), a break below could drag it below 0.6260 (61.8% retracement).

Equities Recap

Asian shares rebounded amid speculation of more central bank rate cuts and possible fiscal stimulus.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3 percent.

Tokyo's Nikkei rallied 0.9 percent to 19,867.12 points, Australia's S&P/ASX 200 index gained 3.1 percent to 5,939.60 points and South Korea's KOSPI surged 0.4 percent to 1,962.93 points.

Shanghai composite index rose 1.8 percent to 2,996.76 points, while CSI 300 index traded 2.1 percent down at 4,082.73 points.

Hong Kong’s Hang Seng traded 1.9 percent higher at 25,516.83 points. Taiwan shares added 0.2 percent to 11,003.54 points

Commodities Recap

Crude oil prices rebounded, clawing back some ground on hopes that a price war by top producers Saudi Arabia and Russia that sparked the biggest daily rout since the 1991 Gulf War will not be sustained. International benchmark Brent crude was trading 11.05 percent higher at $37.10 per barrel by 0546 GMT, having hit a low of $31.26 on Monday, its lowest since Feb. 2016. U.S. West Texas Intermediate was trading 11.10 percent up at $33.50 a barrel, after falling as low as $27.40 on Monday, its lowest since Feb. 2016.

Gold prices plunged by more than 1 percent, retreating from the previous session's jump above the key $1,700 level, as hopes for global stimulus measures to cushion the economic impact of the coronavirus outbreak boosted investor sentiment. Spot gold declined 1.4 percent to $1,657.05 per ounce by 0550 GMT, having touched a high of $1703.28 on Monday, its highest since December 2012. U.S. gold futures lost 0.4 percent to $1,668.50.

Treasuries Recap

The yields on 10-year U.S. Treasuries rose to 0.63 percent, having reached as low as 0.318 percent on Monday.