Market Roundup
- Gold gains on global monetary easing bets
- Oil rises amid stimulus hopes, expected OPEC cuts
- Australia's central bank cuts rates
Economic Data Ahead
- (0400 ET/0900 GMT) Italy Unemployment (Jan)
- (0430 ET/0930 GMT) UK Markit Construction PMI (Feb)
- (0500 ET/1000 GMT) EZ Consumer Price Index - Core (YoY) (Feb) PREL
- (0500 ET/1000 GMT) EZ Producer Price Index (YoY) (Jan)
- (0500 ET/1000 GMT) EZ Consumer Price Index (YoY) (Feb) PREL
- (0500 ET/1000 GMT) EZ Producer Price Index (MoM) (Jan)
- (0500 ET/1000 GMT) EZ Unemployment Rate (Jan)
Key Events Ahead
- (0300 ET/0800 GMT) ECB's De Guindos speech
Currencies Recap
DXY: The dollar index plunged, hovering towards a 1-1/2 month low hit in the prior session on bets that the U.S. Federal Reserve will ease policy starting this month amid growing concerns over the economic impact of the epidemic. The greenback against a basket of currencies traded 0.1 percent down at 97.42, having touched a low of 97.18 on Monday, its lowest since Jan. 16.
EUR/USD: The euro surged, hovering towards a near 2-month peak amid growing expectations that coronavirus-driven monetary easing in the United States can and will run deeper than any similar action in Europe. The European currency traded 0.1 percent up at 1.1144, having touched a high of 1.1185 on Monday, its highest since Jan. 7. Investors’ attention will remain on a series of data from the Eurozone economies, EZ consumer price index, unemployment rate, producer price index and ECB De Guindos speech, ahead of the U.S. ISM-NY Business conditions index and Fed officials speech. Immediate resistance is located at 1.1172, a break above targets 1.1197. On the downside, support is seen at 1.1104, a break below could drag it below 1.1072.
USD/JPY: The dollar declined, hovering towards a near 5-month low hit in the prior session as investors bet on the U.S. Federal Reserve easing policy in a bid to counter the negative impact from the spread of the new coronavirus. The panic in global markets prompted U.S. Federal Reserve Chairman Jerome Powell to issue a statement on Friday stating the central bank would act as appropriate to support the economy, stoking speculation the Fed will deliver a cut when it meets March 17-18. The major was trading 0.5 percent down at 107.71, having hit a low of 107.36 on Monday, its lowest since October 10. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. ISM-NY Business conditions index and Fed officials speech. Immediate resistance is located at 108.79, a break above targets 109.28 (5-DMA). On the downside, support is seen at 107.51, a break below could take it near at 107.17.
GBP/USD: Sterling consolidated below the 1.2800 handle as markets took a cautious view at the start of talks between Britain and the European Union on their relationship after Brexit. On Monday, around 100 UK officials were in Brussels for the first round of talks with the European Commission which are due to last until Thursday. The major traded 0.2 percent up at 1.2783, having hit a low of 1.2725 on Friday, it’s lowest since Oct. 16. Investors’ attention will remain on the trade negotiations, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2813, a break above could take it near 1.2870 (5-DMA). On the downside, support is seen at 1.2725, a break below targets 1.2701. Against the euro, the pound was trading 0.1 percent up at 87.21 pence, having hit a low of 87.41 on Monday, it’s lowest since Nov. 7.
AUD/USD: The Australian dollar surged as the central bank cut interest rates to record lows aimed at cushioning the economy from the impact of the coronavirus. The Reserve Bank of Australia cut the cash rate a quarter-point to a record low of 0.5 percent after its monthly Board meeting, and left the door open to further easing. The Aussie trades 0.1 percent up at 0.6544, having hit a low of 0.6433 on Friday, 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 0.6582 (61.8% retracement of 0.6750 and 0.6433), a break above could take it near 0.6623 (78.6% retracement). On the downside, support is seen at 0.6490, a break below targets 0.6448.
NZD/USD: The New Zealand dollar eased as investors bet the Reserve Bank of New Zealand will cut rates by a quarter-point to 0.75 percent at its policy meeting on March 25, and will move to 0.5 percent by year end. The Kiwi trades 0.1 percent down at 0.6256, having touched a low of 0.6191 on Friday, its lowest level since August 2015. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6303 (38.2% retracement of 0.6487 and 0.6191), a break above could take it near 0.6338 (50% retracement). On the downside, support is seen at 0.6219, a break below could drag it below 0.6203.
Equities Recap
Asian shares rallied as policymakers indicated their willingness to move to ease the economic fallout from the coronavirus.
MSCI's broadest index of Asia-Pacific shares outside Japan rallied 1.4 percent.
Tokyo's Nikkei declined 1.2 percent to 21,082.73 points, Australia's S&P/ASX 200 index rose 0.7 percent to 6,435.70 points and South Korea's KOSPI surged 0.6 percent to 2,014.15 points.
Shanghai composite index rose 0.7 percent to 2,992.14 points, while CSI 300 index traded 0.5 percent up at 4,090.92 points.
Hong Kong’s Hang Seng traded 0.1 percent higher at 26,315.77 points. Taiwan shares added 1.4 percent to 11,327.72 points
Commodities Recap
Crude oil prices surged for a second session on expectations that central banks are likely to enact financial stimulus to offset the impacts of the coronavirus outbreak and growing optimism that OPEC will order deeper output cuts this week. International benchmark Brent crude was trading 0.1 percent higher at $52.82 per barrel by 0531 GMT, having hit a low of $48.92 on Friday, its lowest since July 2017. U.S. West Texas Intermediate was trading 0.4 percent up at $47.71 a barrel, after falling as low as $43.88 on Friday, its lowest since Dec. 2018.
Gold prices surged, extending gains for a second straight session, as expectations grew for monetary policy easing by major central banks to cushion the economic fallout from the coronavirus outbreak. Spot gold rose 0.5 percent to $1,597.92 per ounce by 0533 GMT, having touched a low of $1563.03 on Friday, its lowest since Feb. 12. U.S. gold futures advanced 0.6 percent to $1,599.10.
Treasuries Recap
The Japanese government bond prices fell, with the benchmark 10-year JGB futures falling 0.16 point to 153.72. The 10-year JGB yield rose 3 basis points to minus 0.110 percent. The 20-year JGB yield rose 4 basis points to 0.190 percent, while the 30-year JGB yield rose 3 basis points to 0.310 percent. The two-year JGB yield rose 2 basis points to minus 0.245 percent. The five-year yield rose 2.5 basis points to minus 0.230 percent.
The Australian 3-year yields eased to all-time lows at 0.343 percent. Three-year bond futures added another 2 ticks to stand at 99.585. The 10-year contract firmed 2.5 ticks to 99.2250, implying a yield of just 0.775 percent.
