Market Roundup
- U.S. oil plunges to 18-year low
- Gold falls more than 1 percent
- ECB announces asset purchase program
- Pound dives to lowest since mid-80s
- Australia Unemployment rate slips to 5.1 percent
Economic Data Ahead
- (0500 ET/1000 GMT) EZ Construction Output w.d.a (YoY) (Jan)
- (0500 ET/1000 GMT) EZ Construction Output s.a (MoM) (Jan)
Key Events Ahead
- (0330 ET/0830 GMT) SNB Interest Rate Decision
- (0330 ET/0830 GMT) SNB Monetary Policy Assessment
FX Beat
DXY: The dollar index rallied after the U.S. Federal Reserve promised a liquidity facility for money market mutual funds, while U.S. President Donald Trump moved to accelerate production of desperately needed medical equipment to battle the virus pandemic. The greenback against a basket of currencies traded 0.1 percent up at 101.06, having touched a high of 101.74 on Wednesday, its highest since March 2017.
EUR/USD: The euro surged, rebounding from a near 4-week low hit in the previous session after the European Central Bank announced additional measures in response to the coronavirus outbreak. On Wednesday, the ECB launched a 750 billion euro ($818 billion) emergency bond purchase programme to push down borrowing costs in a bloc struggling with the economic fallout of coronavirus. The European currency traded 0.1 percent up at 1.0916, having touched a low of 1.0801 on Wednesday, its lowest since Feb. 21. Investors’ attention will remain on a series of data from the Eurozone economies and EZ construction output, ahead of the U.S. unemployment benefit claims and current account. Immediate resistance is located at 1.1066 (23.6% retracement of 1.1495 and 1.0801), a break above targets 1.1148 (38.2% retracement). On the downside, support is seen at 1.0777, a break below could drag it below 1.0710.
USD/JPY: The dollar rallied to a near 3-week peak after the U.S. Senate passed legislation providing more than $100 billion to confront the growing coronavirus outbreak by financing free testing for the virus, expanded paid sick leave, additional food aid and other urgently needed steps. The major was trading 0.8 percent up at 108.94, having hit a high of 109.55 earlier, its highest since Feb. 28. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims and current account. Immediate resistance is located at 109.87, a break above targets 110.13. On the downside, support is seen at 107.58 (23.6% retracement of 101.18 and109.55), a break below could take it near at 106.35 (38.2% Fib).
GBP/USD: Sterling plunged, hovering towards its lowest level against the dollar since 1985 and to a more than decade-low versus the euro as coronavirus fears overshadowed stimulus efforts. The major traded 0.7 percent lower at 1.1543, having hit a low of 1.1447 on Wednesday, it’s lowest since mid-80s. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.1861 (23.6% retracement of 1.3200 and 1.1447), a break above could take it near 1.2117 (38.2% retracement). On the downside, support is seen at 1.1410, a break below targets 1.1361. Against the euro, the pound was trading 0.8 percent down at 94.59 pence, having hit a low of 94.99 earlier, it’s lowest since Mar. 2009.
AUD/USD: The Australian dollar slumped to a fresh near 18-year low near the 0.5500 handle, amid worries over tightening liquidity triggered by the coronavirus pandemic. However, the major attempted a minor recovery after the Reserve Bank of Australia pumped a record A$12.7 billion into the banking system. The pair was also supported by data showing Australia’s February month seasonally adjusted Employment Change rose beyond 10K forecast and 13.5K prior figures to 26.7K, while the unemployment rate declined below 5.3 percent expected and earlier to 5.1 percent. The Aussie trades 0.1 percent up at 0.5776, having hit a low of 0.5506 earlier, it’s lowest since Oct. 2002. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6130 (23.6% retracement of 0.6684 and 0.5958), a break above could take it near 0.6236 (38.2% retracement). On the downside, support is seen at 0.5402, a break below targets 0.5345.
NZD/USD: The New Zealand dollar tumbled to an 11-year low below the 0.5500 handle as investors dumped riskier assets. The Kiwi trades 1.3 percent down at 0.5660, having touched a low of 0.5469 earlier, its lowest level since March 2009. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.5843 (23.6% retracement 0.6447 and 0.5469), a break above could take it near 0.5958 (38.2% retracement). On the downside, support is seen at 0.5405, a break below could drag it below 0.5345.
Equities Recap
Asian shares plunged as major central banks efforts to calm financial markets were less effective than many policymakers desired.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 5 percent to a 4-year low.
Tokyo's Nikkei declined 1.1 percent to 16,552.83 points, Australia's S&P/ASX 200 index fell 3.4 percent to 4,782.90 points and South Korea's KOSPI slumped 8.4 percent to 1,457.64 points.
Shanghai composite index eased 0.9 percent to 2,706.13 points, while CSI 300 index traded 1.3 percent down at 3,589.09 points.
Hong Kong’s Hang Seng traded 1.6 percent lower at 21,946.87 points. Taiwan shares shed 5.8 percent to 8,681.34 points.
Commodities Recap
Crude oil prices plunged to multi-year lows as governments’ worldwide accelerated lockdowns to counter the coronavirus pandemic. International benchmark Brent crude was trading 12.15 percent lower at $25.30 per barrel by 0534 GMT, having hit a low of $25.26 earlier, its lowest since Sept. 2003. U.S. West Texas Intermediate was trading 0.1 percent down at $22.01 a barrel, after falling as low as $20.08 on Wednesday, its lowest since Feb. 2002.
Gold prices declined more than 1 percent as the European Central Bank’s measures to mitigate the economic effects of the coronavirus epidemic lifted investor sentiment. Spot gold slumped 0.9 percent to $1,472.92 per ounce by 0543 GMT, having touched a low of $1451.43 on Monday, its lowest since Nov. 26. U.S. gold futures fell 0.7 percent to $1,467.70 per ounce.
Treasuries Recap
The 10-year JGB futures price erased earlier losses to trade at 151.84, up 0.09 point on the day and off their earlier low of 151.20.
The Australian 10-year bond yield jumped more than 50 basis points to 1.647 percent, reaching its highest level since last Ma
