Europe Roundup: Sterling gains after U.S. rate cut shares tumble. Gold nose dives, U.S. crude falls below $30-March 16th,2020

Market Roundup

• Swiss Feb PPI (MoM) -0.9%,0.0% previous

• Swiss Feb PPI (YoY) -2.1%, -1.0% previous

• Italian Feb CPI (YoY) 0.3%,0.4% forecast, 0.5% previous

• Italian Feb CPI (MoM) -0.1%,0.2% forecast, 0.1% previous

• Italian Feb HICP (YoY) 0.2%,0.3% forecast, 0.4% previous

• US March NY Empire State Manufacturing Index 4.00 forecast , 12.90 previous

Looking Ahead - Economic Data (GMT)

• 15:30 US 3-Month Bill Auction 0.390% previous

• 15:30 US 6-Month Bill Auction 0.400% previous

• 18:00 Brasil CAGED Net Payroll Jobs 70.00K forecast, -307.31K previous

• 20:00 Jan US Foreign Buying, T-bonds 41.10B previous

• 20:00 Jan US Overall Net Capital Flow -19.80B forecast, 78.20B previous

Looking Ahead - Events, Other Releases (GMT)

• No Major events scheduled

Fxbeat

EUR/USD: The euro strengthened on Monday, as dollar stumbled after the Federal Reserve slashed interest rates in an emergency move and its major peers offered cheap U.S. dollars to ease a ruinous logjam in global lending markets. The Fed’s emergency 100 basis point cut on Sunday was followed on Monday by the Bank of Japan easing policy further with a pledge to ramp up purchases of exchange-traded funds and other risky assets The drastic manoeuvres were aimed at cushioning the economic impact as the breakneck spread of the coronavirus all but shut down more countries, though they had only limited success in calming panicky investors . Immediate resistance can be seen at 1.1205 (5 DMA), an upside break can trigger rise towards 1.1286 (50% Fib).On the downside, immediate support is seen at 1.1055 (5 DMA), a break below could take the pair towards 1.1000 (Psychological level).

GBP/USD: Sterling gained against the U.S. dollar on Monday, as money markets digested a further surprise cut to U.S. rates to rock-bottom levels by the Federal Reserve in the face of the coronavirus pandemic. The Fed cut rates to a target rate of 0% to 0.25% on Sunday, while five other central banks including the Bank of England took steps to relieve a shortage of dollars and provide extra liquidity as part of a global coordinated action. The pound was last up 0.23% against the U.S. dollar at $1.2309. Immediate resistance can be seen at 1.2425 (Daily high), an upside break can trigger rise towards 1.2563 (5 DMA).On the downside, immediate support is seen at 1.2258 (Daily low), a break below could take the pair towards 1.2200 (Psychological level).

USD/CHF: The dollar dipped against the Swiss franc on Monday after the Federal Reserve unleashed a series of moves on Sunday to stem the global fallout from the coronavirus outbreak, led by a cut in U.S. interest rates to zero percent, the second rate cut in less than two weeks. In a statement, the Fed said it reduced the federal funds rate to a target range of 0% to 0.25%. The Fed, along with five other major foreign central banks, also cut pricing on their swap lines to make it easier to provide dollars to their financial institutions facing stress in credit markets. The U.S. central bank also said it would expand its balance sheet by at least $700 billion in coming weeks. At (GMT 12:16), Greenback dipped 0.78% versus the Swiss franc to 0.9296. Immediate resistance can be seen at 0.935(38.2% fib), an upside break can trigger rise towards 0.9603 (21 DMA).On the downside, immediate support is seen at 0.9396 (61.8% fib), a break below could take the pair towards 0.9300 (Psychological level).

USD/JPY: The dollar declined against the Japanese yen on Monday after the second emergency cut in U.S. interest rates in as many weeks effectively to zero and supportive measures from all corners failed to quell coronavirus fears. Central banks across Asia and Europe also cut borrowing costs and pumped funds into the system in a bid to cushion the economic impact as the breakneck spread of the virus all but shut down more countries. But they had limited success in calming panicky investors. Strong resistance can be seen at 107.91 (21 DMA), an upside break can trigger rise towards 108.98(50 DMA).On the downside, immediate support is seen at 105.53 (5 DMA), a break below could take the pair towards 105.00 (Psychological level).

Equities Recap

European shares plunged on Monday as the coronavirus pandemic raged through much of Europe, with dramatic monetary easing by global central banks failing to reassure investors about its growing economic damage.

At (GMT 13:00),UK's benchmark FTSE 100 was last trading down at 7.15 percent, Germany's Dax was down by 9.58 percent, France’s CAC finished was down by 10.55 percent.

Commodities Recap

Gold nosedived on Monday, as investors dumped hard assets in favour of cash after a U.S. rate cut failed to stem a coronavirus-led sell-off.

By 1053 GMT, spot gold was down 2% at $1,498.42 per ounce, while U.S. gold futures were 1.2% lower at $1,498.10 per ounce.

U.S. crude fell below $30 on Monday as emergency rate cuts by the U.S. Federal Reserve and its global counterparts failed to tame markets and China’s factory output plunged at the sharpest pace in 30 years amid the spread of coronavirus.

Brent crude was down $2.89, or 8.5%, to $30.96 a barrel by 1012 GMT. The front-month price had risen $1 earlier in the session.U.S. West Texas Intermediate (WTI) crude was at $29.94, down $1.79 or 5.6%.

Treasuries Recap

European bond yields jumped to multi-month highs on Monday after a second rate cut by the U.S. Federal Reserve and coordinated central bank action to address the impact of coronavirus drove investors away from risk assets.

Spanish and Portuguese 10-year bond yields rose to 9-1/2 month highs at 0.74% and 0.93% respectively, up as much as 13 basis points on the day .

French 10-year yields also soared as much as 14 basis points to 3-1/2 month highs at 0.14%, while Italian 10-year yields were up 17 basis points to 1.98%.