Forex news for Asia trading Monday 16 March 2020
- New Zealand 'business continuity' package to be announced Tuesday
- Coronavirus - Los Angels orders the closure of restaurants, bars, night clubs
- China Stats Bureau - still confident of achieving full-year economic growth target
- "New Zealand now faces a sharp recession … inevitable"
- Amidst the gloom - Italian hospital saves Covid-19 patients lives by 3D printing valves
- China data - huge collapse in industrial production, retail sales, jump in unemployment
- RBNZ's Ha says QE program to be ready for month of May, if needed
- CIBC suspect the Bank of Canada will cut cash rate on Monday
- Coronavirus - New York city to close nightclubs, cinemas, concert venues from March 17
- PBOC one year fund injection, 100bn yuan MLF
- MGM temporarily closing Las Vegas casinos starting March 17th
- US United Airlines says it will cut capacity by about 50% for April and May
- RBNZ's assistant gov Hawkesby - rate cut gives us time to assess
- Canada says a major announcement coming on Monday regarding response to the coronavirus
- PBOC sets USD/ CNY reference rate for today at 7.0018 (vs. yesterday at 7.0033)
- FX option expiries for Monday March 16 at the 10am NY cut
- RBA 'ready for QE' statement is seeing AUD trade lower
- RBA says it is ready to purchase Australian government bonds
- Japan PM Abe says will enact unprecedented economic policies
- China reported 16 new cases of coronavirus and 14 new deaths on Sunday - NHC
- Coronavirus response - G7 video conference from 1400GMT on Monday 16 March 2020
- Clinical trial to evaluate a coronavirus vaccine will begin on Monday
- Data catch-up: Japan core machinery orders +2.9% m/m in January
- EU finance ministers to meet Monday - on a coordinated economic response to coronavirus
- Data catch-up: UK house prices, March +1% m/m
- BOJ to hold an emergency meeting
- An opinion piece to ponder: "Why Britain is actually letting the coronavirus spread"
- Coronavirus - CBOE joins the CME in closing their trading floor - complete shift to screen trading
- US' CDC recommend gatherings over 50 people should be postponed for 8 weeks
- Citi on the Fed (and global coordination) announced earlier
- WSJ report that Facebook, Google, Amazon, and others form coronavirus task force
- Australia - RBA has added around AUD 6bn to banking system liquidity
Powell Press conference (via phone link up)
- Fed's Powell says he does not think negative rates in the US are appropriate
- Fed's Powell says there will be no FOMC meeting this week - action today instead
- Coronavirus - Fed's Powell says US economy was on solid footing going into this
- USDJPY falls after FOMC emergency rate cut
- US equity index futures trading on Globex have hit limit down
- Ahead of Fed Powell's press conference - a sneak preview from RBNZ's Orr
FOMC emergency rate cut
- The Federal Reserve (and coordinated global actions) at a glance - what it means
- Trump comments - approves of Fed action, meeting with grocers
- Here is the ECB on the global central bank co-ordinated move
- Federal Reserve acts on a Sunday evening to slash rates to near zero
- Coronavirus - NY Governor de Blasio to close New York city schools
- Trade ideas thread - Monday 16 March 2020
- Goldman Sachs S&P 500 forecast, further 10% lower within 3 months, but could be much further
- NZ finmin Robertson welcomes RBNZ rate cut, part of coordinated response
- US Treasury Secretary Mnuchin wants to use some of the 2008 bailout tools
- Coronavirus - Lululemon to close Europe and North American stores March 16 through to 27
- Goldman Sachs cuts its US Q1, Q2, and Q3 GDP forecast due to coronavirus
- France says more than 5,400 coronavirus cases up from 4449 on Saturday
- Monday morning open levels - indicative forex prices - 16 March 2020
Weekend
- US President Trump threatens (again) to fire Fed Chair Powell
- Coronavirus - Anyone arriving in Australia from overseas will to be forced to self-isolate for 14 days
- White House says US President Trump coronavirus test result was negative
- Coronavirus - Spain has declared a state of emergency
- US President Trump says he has taken the coronavirus COVID-19 test
- Medical professor at Johns Hopkins University on US coronavirus - worst public health epidemic since polio
- Coronavirus - France to shut cafes, shops, restaurants, cinemas
- Trump extends travel ban to include UK and Ireland
- French state mulls cash injection into Air France-KLM
- Apple closes all stores outside of China
The news over the weekend was of a continuing acceleration of the economic impact of the coronavirus outbreak with Apple shutting down all stores globally ex. China, and countries including France and Spain going into various states of lock down.
The Reserve Bank of New Zealand opened the new trading week with an announcement of an emergency 75bp cash rate cut, which slashed more than 2% from the NZD in very early trade, AUD down around 1% alongside. But, the bigger news was to follow, with an announcement from a weekend FOMC meeting of the Fed cutting to zero and adding in 700bn of QE, and with coordinated moves alongside from the ECB, BoE, BOJ and others.
In brief the Fed move:
- cut policy rates to 0%-0.25%
- commitment to holding rates close to zero "until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals."
- Quantitative easing - Fed buying 500bn Treasuries & 200bn MBS
- banks can borrow from the window for up to 90 days
- signalled to banks they should use their liquidity and capital buffers to lend to household and firms
- eliminated reserve requirements
For equities, trade in ES dropped to its limit low (if you need an explanation on what this means, check out the post on the limit down move bolded above).
Regional equities as I post
- Nikkei: +0.11%
- Hang Seng: -1.97%
- Shanghai: -0.36%
- ASX: -6.69%
Currencies swung about in good sized ranges for the session - a great day for the day traders in Asia with multiple plays:
- EUR/USD initially moved higher on the session to tickle 1.12 but since dropped under 1.11 (above there now)
- USD/JPY dropped as low as circa 105.75 before staging a 150+ point up-move to highs circa 107.55. USD/CHF followed a similar pattern, lows around 0.9445 and highs above 0.9550.
- Cable lows early around 1.2250 to highs circa 1.2425 before (nearly) all the way back down again.
- USD/CAD had early lows under 1.3735 before rebounding to highs just shy of 1.3900. Oil lost ground but is off the session lows.
- Both the AUD/USD and NZD/USD were sold heavily in the session but have bounced from their lows. The RBA is preparing a policy announcement from Thursday but in a statement today said they are prepared to buy Australian government bonds. QE.
Coming up is an announcement from the Bank of Japan, the Bank has moved its scheduled meeting from later this week to today (the meeting began at 0300GMT). The last time the BOJ haled an emergency meeting was in response to the 2011 earthquake disaster.