ForexLive Asia FX news wrap: Market hungry for encouraging coronavirus news

Author: Eamonn Sheridan | Category: News

Forex news for Asia trading Friday 17 April 2020 

Late NY/very early Asia markets were set on fire by a report that the coronavirus-fighting drug remdesivir was showing encouraging signs:

Not only did stock in the company, Gilead, rise but so did broader equity indexes trading at the time along with forex 'risk'. I described at the time the 'ballistic' raise in risk barometer AUD/JPY (this chart posted earlier in the session):

Forex news for Asia trading Friday 17 April 2020 Title Here

There were plenty of doubts about the report, not a scientific study, too many caveats, and more. But, those with experience of the Asia morning know such concerns

DO

NOT

MATTER:

Sure the caveats are all important, and relevant, and cogent, but for traders, the moves were there and not be sneezed at (no pun intended).

Alongside the COVID-19 news we got some news for oil - Saudi and Russia said they'd do more. Oil did not see the gains other markets did but posted a small rise.

After all this we had US President Trump providing a bit of a summary of the 'phased' reopening of the US economy. This will be up to each individual state governor but Trump's overview was useful.

Next up was the wait for the China data dump - Q1 GDP and March activity data. GDP was horrendous, a drop of 6.8% against already low expectations. The March activity data was more interesting, not only because it provides a more recent picture of the economy but also because it showed a stark divergence between industrial production data and retail sales. Long story short here is that supply disruptions do not appear as bad as were initially thought they'd be but demand disruption is deep. This is a recipe for deflation, that will be exported to the globe. The other thing to keep in mind is that China is 6-8 weeks ahead of the rest of us in its virus impacts, the data we got from China today will be repeated all over in the months ahead.

Across forex, AUD, NZD, EUR, GBP, CAD were moved higher against the USD on the coronavirus drug news while USD/JPY moved higher alongside. USD/JPY has since subsided to retrace most of its gain while retracements elsewhere have not been so deep.

Also, check out the Singapore data for a surprise positive result.

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