Forex news from the European morning session - 27 January 2020
Headlines:
- Chinese state media confirms 2,835 cases of coronavirus
- US futures take another leg lower on the day
- USD/CNH closes in on 7.00 level as offshore yuan extends losses on the day
- Dollar, yen keep higher amid more subdued risk mood
- Germany January Ifo business climate index 95.9 vs 97.0 expected
- Italian bonds surge higher on Salvini defeat
- Hainan confirms first fatality from coronavirus infection
- Thailand says that 48 people are being monitored for possible coronavirus infection
Markets:
- JPY leads, AUD lags on the day
- European equities lower; E-minis down 1.4%
- US 10-year yields down 5.2 bps to 1.632%
- Gold up 0.6% to $1,581.38
- WTI down 2.8% to $52.70
- Bitcoin up 2.3% to $8,692
It is all about the softer risk mood to start the week as markets continue to be gripped by fears of the new coronavirus outbreak situation.
The rout already started in Asia but deepened in European morning trade as risk trades have been pretty much smashed across the board today.
European equities are deep in the red while US futures accelerated losses to nearly 1.5% ahead of the cash open later. Meanwhile, bonds are strongly bid and that is helping the likes of gold and the yen to stay bid during the session.
USD/JPY is lingering around 108.90-10 levels amid the risk-off mood with price keeping above the 100-day moving average @ 108.72 still for the moment.
The dollar and franc also held more firm in general, as the likes of the aussie and kiwi slowly eased lower. AUD/JPY is down by over 1% as it takes out a couple of key technical levels with the aussie being the worst performing major currency so far today.
As things stand, fear is winning out amid the uncertainty associated with the coronavirus outbreak. Oil, commodities, stocks; just about everything is down at the moment.
Looking ahead, we'll have to see how Wall Street takes to the current risk mood and if dip-buyers can find any value in the fear we're seeing at the moment.
