Market Roundup
- Australian PM Morrison announces a stimulus package of A$66.4 billion.
- RBNZ announces the purchase of $30 billion NZGBs.
- Oil markets ease amid coronavirus fears
Economic Data Ahead
- No major economic data releases
Key Events Ahead
- No significant events scheduled
FX Beat
DXY: The dollar index consolidated below multi-year peak amid hopes for big fiscal spending to mitigate the damage to the global economy. The greenback against a basket of currencies traded 0.2 percent up at 102.18, having touched a high of 102.99 on Friday, its highest since January 2017.
EUR/USD: The euro rebounded after tumbling to 3-month low earlier in the session, as the greenback eased from recent peaks. The European currency traded 0.5 percent up at 1.0753, having touched a low of 1.0635 earlier, its lowest since April 2017. Investors’ attention will remain on a series of data from the Eurozone economies and EZ prelim EZ consumer confidence, ahead of Chicago Fed National Activity Index. Immediate resistance is located at 1.0801, a break above targets 1.0838 (23.6% retracement of 1.1495 and 1.0652). On the downside, support is seen at 1.0603, a break below could drag it below 1.0578.
USD/JPY: The dollar plunged after rising to a 1-month peak in the prior session after U.S. Senate failed to pass the much-awaited rescue package. On Sunday, the Senate failed to clear a key procedural hurdle on a $1.6 trillion emergency rescue package, raising pressure on both parties to try again to reach a deal to address the economic crisis of the coronavirus outbreak. The major was trading 0.5 percent down at 110.15, having hit a high of 111.50 on Friday, its highest since Feb. 24. Investors’ will continue to track the broad-based market sentiment, ahead of Chicago Fed National Activity Index. Immediate resistance is located at 111.68, a break above targets 112.22. On the downside, support is seen at 109.06 (23.6% retracement of 101.18 and 111.50), a break below could take it near at 108.60 (5-DMA).
GBP/USD: Sterling nudged up, extending prior session rebound after the Bank of England announced coordinated action to enhance liquidity in U.S. dollars on Friday by holding more frequent currency swap operations. The major traded 0.3 percent higher at 1.1692, having hit a low of 1.1409 on Thursday, it’s lowest since 1985. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.1832 (23.6% retracement of 1.3200 and 1.1406), a break above could take it near 1.2093 (38.2% retracement). On the downside, support is seen at 1.1484, a break below targets 1.1410. Against the euro, the pound was trading 0.2 percent down at 91.18 pence, having hit a low of 94.99 on Thursday, it’s lowest since Mar. 2009.
AUD/USD: The Australian dollar slumped despite Australia announcing additional stimulus to support the economy. The government announced a $66 billion second coronavirus stimulus, bolstering the measures of the first $17.6 billion pledge, and is intended to help small businesses stay afloat, and keep people employed, until the coronavirus-related economic downturn has passed. The Aussie trades 0.6 percent down at 0.5771, having hit a low of 0.5506 on Thursday, 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 0.5956 (38.2% retracement of 0.6684 and 0.5506), a break above could take it near 0.6095 (50% retracement). On the downside, support is seen at 0.5660, a break below targets 0.5616.
NZD/USD: The New Zealand dollar opened with a gap down following The Reserve Bank of New Zealand’s QE. The RBNZ will purchase $30bn of New Zealand Government Bonds (NZGBs) with a range of maturities across the yield curve over the next 12 months, with purchases starting this week. The Kiwi trades 1.8 percent down at 0.5642, having touched a low of 0.5469 on Thursday, 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 0.5700 (23.6% retracement 0.6447 and 0.5469), a break above could take it near 0.5843 (38.2% retracement). On the downside, support is seen at 0.5542, a break below could drag it below 0.5509.
Equities Recap
Asian shares plunged on worries about tightening liquidity amid the worsening coronavirus crisis.
Tokyo's Nikkei surged 2.02 percent to 16,887.78 points, Australia's S&P/ASX 200 index declined 5.6 percent to 4,546.00 points and South Korea's KOSPI eased 5.3 percent to 1,482.46 points.
Shanghai composite index fell 3.1 percent to 2,660.17 points, while CSI 300 index traded 3.4 percent down at 3,530.31 points
Hong Kong’s Hang Seng traded 4.9 percent lower at 21,693.96 points. Taiwan shares shed 3.7 percent to 8,890.03 points.
Commodities Recap
Crude oil prices declined as governments escalated lockdowns to curb the spread of the global coronavirus outbreak that has slashed the demand outlook for oil. International benchmark Brent crude was trading 2.9 percent lower at $26.39 per barrel by 0609 GMT, having hit a low of $24.51 on Wednesday, its lowest since Sept. 2003. U.S. West Texas Intermediate was trading 1.7 percent down at $22.99 a barrel, after falling as low as $20.08 on Wednesday, its lowest since Feb. 2002.
Gold prices eased as investors stockpiled cash, with a rising numbers of coronavirus-led national lockdowns threatening to overshadow stimulus measures from global central banks to combat the economic damage. Spot gold declined 0.3 percent to $1,494.20 per ounce by 0611 GMT, having touched a low of $1451.43 last week, its lowest since Nov. 26. U.S. gold futures climbed 0.8 percent to $1,496.70 per ounce.
Treasuries Recap
The Japanese government bond prices gained, with the benchmark futures posting their first gains in seven sessions. The benchmark 10-year JGB futures rose 0.41 point to 151.12 and posted its first session of gains in seven days, while the benchmark 10-year JGB yield fell 2.5 basis points to 0.065 percent. At the longer end, the 20-year JGB yield fell 1.5 basis points to 0.315 percent and the 30-year JGB yield fell 0.5 basis points to 0.435 percent. The yields on shorter maturities fell even more, with the two-year JGB yield falling 4 basis points to minus 0.210 pecent. The five-year yield fell 2.5 basis points to minus 0.075 percent.
