Market Roundup
- NZ injects $7.3 bln stimulus to rescue economy
- RBA Minutes: prepared to ease monetary policy further
- Sterling at five-month low
- Oil prices jump $1 as sharp falls draw investors
Economic Data Ahead
- (0430 ET/0930 GMT) UK Claimant Count Rate (Feb)
- (0430 ET/0930 GMT) UK Claimant Count Change (Feb)
- (0430 ET/0930 GMT) UK ILO Unemployment Rate (3M) (Jan)
- (0430 ET/0930 GMT) UK Average Earnings Including Bonus (3Mo/Yr) (Jan)
- (0430 ET/0930 GMT) UK Average Earnings Excluding Bonus (3Mo/Yr) (Jan)
- (0500 ET/1000 GMT) EZ ZEW Survey - Economic Sentiment (Mar)
- (0500 ET/1000 GMT) EZ Labor Cost (Q4)
- (0500 ET/1000 GMT) EZ Construction Output w.d.a (YoY) (Jan)
- (0500 ET/1000 GMT) EZ Construction Output s.a (MoM) (Jan)
- (0500 ET/1000 GMT) German ZEW Survey - Current Situation (Mar)
- (0500 ET/1000 GMT) German ZEW Survey - Economic Sentiment (Mar)
Key Events Ahead
- N/A UK 30-y Bond Auction
FX Beat
DXY: The dollar index held firm above 21-DMA as signs of more economic support from policymakers boosted investor risk sentiment. U.S. President Donald Trump urged Americans to halt most social activities for 15 days and not assemble in groups larger than 10 people in a newly aggressive effort to reduce the spread of the virus in the United States. The greenback against a basket of currencies traded 0.4 percent up at 98.38, having touched a high of 98.81 on Friday, its highest since feb. 27.
EUR/USD: The euro eased as investors bet that dealing with the effects of coronavirus will blow a bigger-than-expected hole in the country’s finances. On Monday, Eurozone finance ministers pledged an unlimited commitment to fight the economic fallout of the pandemic, saying they would do whatever it takes and more to restore confidence and a rapid recovery. The European currency traded 0.1 percent down at 1.1172, having touched a low of 1.1054 on Friday, its lowest since March 2. Investors’ attention will remain on a series of data from the Eurozone economies, EZ ZEW Survey - economic sentiment, construction output, and German ZEW Survey, ahead of the U.S. retail sales, capacity utilization, business inventories, NAHB housing market index and JOLT Job Opening. Immediate resistance is located at 1.1223 (38.2% retracement of 1.1495 and 1.1055), a break above targets 1.1275 (50% retracement). On the downside, support is seen at 1.1119, a break below could drag it below 1.1053 (21-DMA).
USD/JPY: The dollar steadied, reversing some of its previous session losses after a Reuters Tankan survey showed Japanese business confidence plunged to decade lows in March as the spreading epidemic stoked fears of a global recession. The major was trading 0.7 percent up at 106.63, having hit a high of 108.50 on Friday, its highest since March 3. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. retail sales, capacity utilization, business inventories, NAHB housing market index and JOLT Job Opening. Immediate resistance is located at 108.04 (21-DMA), a break above targets 108.53. On the downside, support is seen at 105.00, a break below could take it near at 104.50.
GBP/USD: Sterling plunged, hovering towards an over 5-month low hit in the prior session, weighed down by worries about Britain’s exit from the European Union and also its sizable current account deficit. Moreover, the selling pressure around the major intensified as money markets priced in nearly a 30 percent probability of a quarter-point rate cut at the BoE’s next policy meeting. The major traded 0.3 percent lower at 1.2231, having hit a low of 1.2202 on Monday, it’s lowest since Oct. 10. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2437 (23.6% retracement of 1.3200 and 1.2202), a break above could take it near 1.2583 (38.2% retracement). On the downside, support is seen at 1.2179, a break below targets 1.2154. Against the euro, the pound was trading 0.2 percent down at 91.28 pence, having hit a low of 91.50 on Monday, it’s lowest since Aug. 22.
AUD/USD: The Australian dollar plunged to a fresh 11-year low after minutes of the Reserve Bank of Australia’s March meeting released earlier showed policymakers were ready and willing to ease monetary conditions further to support the Australian economy. The Aussie trades 0.8 percent down at 0.6074, having hit a low of 0.6065 earlier, it’s lowest since October 2008. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6211 (23.6% retracement of 0.6684 and 0.6065), a break above could take it near 0.6301 (38.2% retracement). On the downside, support is seen at 0.6036, a break below targets 0.6004.
NZD/USD: The New Zealand dollar eased following weak Westpac Consumer Sentiment Index data. Westpac Consumer Sentiment Index declined from 109.9 to 104.2 in the first quarter, while the Present Conditions Index fell from 110.1 to 103.4, with the Expected Conditions Index falling from 109.8 to 104.7. Earlier in the day, the major attempted a minor recovery after New Zealand said it would pump NZ$12.1 billion ($7.31 billion) or 4 percent of its GDP into the economy to soften the negative economic impact from the coronavirus. The Kiwi trades 0.1 percent down at 0.6039, having touched a low of 0.5984 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 0.6094 (23.6% retracement 0.6447 and 0.5984), a break above could take it near 0.6161 (38.2% retracement). On the downside, support is seen at 0.5970, a break below could drag it below 0.5935.
Equities Recap
Asian shares consolidated within narrow ranges after suffering its third-largest daily percentage decline on record in the previous session.
MSCI's broadest index of Asia-Pacific shares outside Japan traded flat.
Tokyo's Nikkei rose 0.1 percent to 17,011.53 points, Australia's S&P/ASX 200 index gained 5.8 percent to 5,293.40 points and South Korea's KOSPI slumped 2.5 percent to 1,672.44 points.
Shanghai composite index eased 0.3 percent to 2,779.64 points, while CSI 300 index traded 0.5 percent down at 3,709.68 points.
Hong Kong’s Hang Seng traded 1.1 percent higher at 23,301.25 points. Taiwan shares shed 2.8 percent to 9,439.63 points.
Commodities Recap
Crude oil prices rose more than $1 as the recent sharp falls due to the coronavirus pandemic encouraged profit-taking, although the market remains volatile as the spread of the infection disrupts economies. International benchmark Brent crude was trading 3.6 percent higher at $30.65 per barrel by 0612 GMT, having hit a low of $29.45 on Monday, its lowest since Jan. 2016. U.S. West Texas Intermediate was trading 3.9 percent up at $29.84 a barrel, after falling as low as $27.40 last week, its lowest since Feb. 2016.
Gold prices declined, extending losses for the sixth straight session, as investors continued to sell assets across markets to keep their money in cash amid heightened panic over the coronavirus pandemic. Spot gold eased 1.9 percent to $1,485.15 per ounce by 0616 GMT, having touched a low of $1451.43 on Monday, its lowest since Nov. 26. U.S. gold futures rose 1.7 percent to $1,511.50.
Treasuries Recap
On Monday, U.S. government bonds yields fell but remained off the session lows plumbed in overnight trade after the Federal Reserve announced that it would slash interest rates near zero and pledged billions of dollars in asset purchases.
