Forex news from the European morning session - 26 March 2020
Headlines:
- Fed chair Powell: We're not going to run out of ammunition
- ECB says that it has started bond purchases under new program today
- Singapore steps up fiscal measures, to triple cash payouts
- India announces $22.6 billion stimulus package to deal with virus fallout
- The ECB is pushing the boundaries with its new QE program
- UK set to unveil new scheme to help over 2 million self-employed workers - report
- Tokyo reportedly sees more than 45 new coronavirus cases today
- Germany April GfK consumer confidence 2.7 vs 7.5 expected
- INSEE says that French economic activity is at 65% of normal levels
- MAS to provide up to $60 billion of funding to banks through new US dollar facility
- RKI reports 36,508 coronavirus cases in Germany, up by 4,954 cases
- Russia reportedly to bar all international flights from 27 March onwards
- The House sets Friday for vote on $2 trillion coronavirus relief bill
Markets:
- JPY leads, USD lags on the day
- European equities lower; E-minis down 0.9%
- US 10-year yields down 8 bps to 0.79%
- Gold up 0.1% to $1,618
- WTI down 2.5% to $23.90
- Bitcoin up 1.0% to $6,664
It was a bit of a countdown to the US weekly initial jobless claims report later today as the market proceeded with caution in anticipation of the blockbuster release.
The dollar was mixed to start the session but gradually eased against most major currencies but kept higher against the risk/commodities bloc. However, that all changed as Fed chair Powell jawboned the currency lower in a rare television appearance on NBC Today.
Powell said that the Fed isn't going to run out of ammunition and that they still have policy room to act, weakening the greenback across the board.
USD/JPY fell from 110.00 to 109.60 with AUD/USD climbing from 0.5970 to 0.6020. Meanwhile, EUR/USD also crept higher from 1.0950 to 1.0979 on the session.
As for risk, equities remain on the softer side as European stocks and US futures keep modest losses amid the cautious tone in the market. Oil is also sitting lower on the day in a relatively narrow range so far with gold keeping near flat levels for the most part.
The bond market though was generally bid amid the defensive risk mood but also as the ECB confirmed that they stepped in today with bond purchases via their new QE program.
Looking ahead, all eyes are now on the US weekly initial jobless claims report and you can check out Adam's preview on the key release here.
