Forex news from the European morning session - 20 March 2020
Headlines:
- German state of Bavaria to impose state-wide curfew for the next two weeks
- Spain becomes fourth country to report more than 1,000 coronavirus deaths
- Volvo to temporarily shut down US, Swedish factories
- Russia says that oil prices are very unpleasant, but not a catastrophe for the country
- ECB's de Cos: Asset purchase program to be completely flexible
- Nasdaq futures hit limit-up band of 7,629
- Just about everything is gaining today, except the dollar
- France says that it is 'probable' that they will have to extend lockdown period
- ECB's Villeroy: Determination of ECB to act was unanimous
- BOE suspends 2020 annual bank stress tests
- Italy reportedly may extend lockdown to at least 1 May
- Russia said to see Saudi Arabia's oil plan as blackmail, will not back down
- PBOC adviser says that there is scope for more RRR cuts in China
- Australia says to lift debt ceiling to A$850 billion
- RBA QE begins
Markets:
- AUD leads, USD lags on the day
- European equities higher; E-minis up 2.5%
- US 10-year yields down 14 bps to 0.99%
- Gold up 2.3% to $1,505
- WTI up 2.4% to $25.83
- Bitcoin up 6.8% to $6,671
It was a rather straightforward session as the market behaved much calmer and friendlier, although the heightened volatility was still indubitably present.
Equities switched higher to post gains and Nasdaq futures also hit limit-up while the bond market also continued to respond well to the ECB stimulus package two days ago.
European equities opened with gains and never really let up since the opening bell, while bonds were steadily bid throughout the session.
The calm there was accompanied by a sharp retracement in the dollar, although the greenback continues to sit on the throne if you're taking into account the week as a whole.
The dollar saw stronger losses against the likes of the pound, aussie, loonie and kiwi in particular. That shouldn't be much of a surprise considering levels in sterling and the aussie are the lowest since 1985 and 2002 respectively.
Cable raced higher from 1.1640 to 1.1878 while AUD/USD jumped up from 0.5830 to 0.5985 before both pairs also backed off a little as dollar losses consolidated.
EUR/USD moved higher from 1.0730 to 1.0830 before seeing gains retrace almost completelty to near flat levels close to 1.0700 currently.
Elsewhere, gold and oil also kept higher amid weakness in the dollar but oil gains have been slightly tempered with amid headlines from Russia not really signaling that they will be coming to the negotiating table with Saudi Arabia just yet.
Looking ahead, it is all calm in the market for now but the key question is for how long can this keep up as the rest of the world continues to shut down?
I wish everyone safe health and hope you guys have a wonderful weekend ahead.
