Market Roundup
- Brent crude poised for worst week since 1991
- Gold set for a biggest weekly drop in nearly 7 years
Economic Data Ahead
- No major economic data releases
Key Events Ahead
- (0700 ET/1200 GMT) Bank of England Minutes
FX Beat
DXY: The dollar index held firm near a 2-week peak after the New York Federal Reserve said it would make the money available in three tranches of $500 billion each and that it would start purchasing a broader range of U.S. Treasury securities. The greenback against a basket of currencies traded flat at 97.45, having touched a low of 94.65 on Monday, its lowest since September 27, 2018.
EUR/USD: The euro steadied after falling to a near 2-week low in the prior session. On Thursday, the European Central Bank approved fresh stimulus measures to help the eurozone economy cope with the growing cost of the coronavirus epidemic but kept interest rates unchanged. The European currency traded 0.2 percent up at 1.1205, 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, ahead of the U.S. import and export price index, and Michigan consumer sentiment index. Immediate resistance is located at 1.1275 (50% retracement of 1.1495 and 1.1055) a break above targets 1.1327 (61.8% retracement). On the downside, support is seen at 1.1133, a break below could drag it below 1.1095.
USD/JPY: The dollar surged, extending previous session gains after the Federal Reserve said it will inject liquidity into a banking system showing signs of stress. The Federal Reserve Bank of New York said it will introduce $1.5 trillion in new repo operations this week and start purchasing a range of maturities as part of its monthly Treasury purchases in response to stem panic caused by a market meltdown. The major was trading 0.9 percent up at 105.59, having hit a low of 101.18 on Monday, its lowest since October 2016. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. import and export price index, and Michigan consumer sentiment index. Immediate resistance is located at 106.99 (78.6% retracement of 108.57 and 101.18), a break above targets 107.51. On the downside, support is seen at 104.09, a break below could take it near at 103.08.
GBP/USD: Sterling declined, hovering towards a 5-month low recorded in the prior session as investors scrambled for dollars following the European Central Bank’s decision to keep interest rates on hold. On Wednesday, the British currency attempted a minor recovery as investors welcomed stimulus measures from the Bank of England and the British government, including an interest rate cut and billions of pounds of support for struggling firms. However, U.S. President Donald Trump's restrictions on travel from Europe and ECB's stimulus measures falling short of expectations dented the bid tone around the major. The major traded 0.05 percent lower at 1.2560, having hit a high of 1.3200 on Monday, it’s highest since Jan. 31. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2656 (23.6% reracement of 1.3200 and 1.2490), a break above could take it near 1.2760 (38.2% retracement). On the downside, support is seen at 1.2438, a break below targets 1.2392. Against the euro, the pound was trading 0.2 percent down at 89.10 pence, having hit a low of 89.39 earlier, it’s lowest since Oct. 10.
AUD/USD: The Australian dollar attempted a minor recovery from an 11-year low, as the greenback consolidated within narrow ranges amid coronavirus fears. The Aussie trades 0.8 percent up at 0.6288, having hit a low of 0.6211 on Thursday, 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 0.6350, a break above could take it near 0.6392 (38.2% retracement of 0.6684 and 0.6211). On the downside, support is seen at 0.6200, a break below targets 0.6172.
Equities Recap
Asian shares slumped as coronavirus outbreak panic gripping world financial markets deepened.
MSCI's broadest index of Asia-Pacific shares outside Japan dropped 2 percent and is down 12.8 percent this week.
Tokyo's Nikkei declined 6.1 percent to 17,431.05 points, Australia's S&P/ASX 200 index rose 4.4 percent to 5,539.30 points and South Korea's KOSPI slumped 3.4 percent to 1,771.44 points.
Shanghai composite index eased 1.2 percent to 2,887.43 points, while CSI 300 index traded 1.4 percent down at 3,895.31 points.
Hong Kong’s Hang Seng traded 2.01 percent lower at 23,819.66 points. Taiwan shares shed 2.8 percent to 10,128.87 points.
Commodities Recap
Crude oil prices steadied but were set for its biggest weekly drop since 1991, while U.S. crude was heading for the worst week since 2008 as panic about plunging demand from the coronavirus outbreak grips the market. International benchmark Brent crude was trading 2.9 percent higher at $33.70 per barrel by 0549 GMT, having hit a low of $31.26 on Monday, its lowest since Feb. 2016. U.S. West Texas Intermediate was trading 3.6 percent up at $32.02 a barrel, after falling as low as $27.40 on Monday, its lowest since Feb. 2016.
Gold prices slumped to a 5-week low and were on track to post their biggest weekly drop in nearly seven years, as a rout in global equities forced investors to cover margin calls. Spot gold was trading 0.3 percent up to $1,583.48 an ounce by 0603 GMT, having touched a low of $1551.45 earlier, its lowest since Feb. 5. For the week, it was down about 6.7% - the biggest since June 2013. U.S. gold futures fell 1.7 percent to $1,563.10.
Treasuries Recap
On Thursday, longer-dated U.S. Treasury yields rose after the New York Federal Reserve took steps to boost liquidity in the banking system. The 10-year note yield was last at 0.882 percent, up from 0.822 percent at Wednesday's close.
