Forex news for New York trading-from-home for March 20, 2020:
- UK govt grants will cover 80% of salary for workers as programs rolled out
- Fed adds further swap line operations with 4 other central banks
- Initial jobless claims 281K vs 220k estimate
- Texas oil regulator to address OPEC meeting in June
- Italy virus cases rise to 47,021 vs 41,035 yesterday
- Baker Hughes rig counts total 772 versus 792 last week
- German coronavirus cases rises to 18,607 from 15,218
- Trudeau: We received 500K applications for unemployment vs 27K normally
- New York Governor Cuomo says 100% of non-essential workforce must stay home
- ECB provides further flexibility to banks on coronavirus
- Swiss government announces CHF32B economic support package
- US will move tax filing deadline to July 15 from April 15
- US February existing home sales 5.77m vs 5.51m expected
- Illinois announces 163 new cases and stay-at-home order for Saturday
- CFTC commitments of traders: EUR flips to longs and at the highest level since July 2018
- CME says Ronin Capital unable to meet capital requirements
- Ohio state initial jobless claims at 139K from Sun-Thurs vs 4.8K a week ago
Markets:
- Gold up $22 to $1493
- WTI crude down $2.79 to $22.43
- US 10-year yields down 27 bps to 0.867% -- most in a day since 2009
- S&P 500 down 104 points to 2305 -- down 17.7% on the week, worst since Oct 2008
- GBP leads, NZD lags
The wild moves in markets are beginning to feel normal. A big one came in the pound today as it ripped to 1.1934 ahead of the London fix only to crater back down to 1.1600. Earlier in Asian trade it had hit 1.1412, which is a 35-year low. The new measures from the UK are extremely expensive with the government promising to pay workers and support businesses. Whether it's the cost or just the momentum, the market didn't like it.
USD/JPY continued to hold a bid in both risk-on and risk-off scenarios. US stocks were higher to start the day but perhaps the rally in USD/JPY as New York arrived was a sign of things to come. The pair climbed to 111.51 at the high, breaking the Asian low and from 109.30 at the start of European trade.
EUR/USD hit 1.0660 in Asia then jumped to 1.0820 just before European trading. It was all downhill from there and touched 1.0640 late but that didn't inspire any stops or selling even though it's a fresh low since 2017. The ECB program didn't get much attention.
The commodity currencies posted an impressive rally in Asia but gave most of it back late. The Canadian dollar held up surprisingly well and finished the day only behind GBP. The thing to watch on the weekend is an oil production curtailment in Texas, with Saudi Arabia cutting as well. That would be big news for crude and Canadian producers who are facing bankruptcy.
Stay safe this weekend.
