Cautious start to a big week ahead, Oil rout extends, coronavirus, lockdown news eyed
Fundamental Forex Analysis

Cautious start to a big week ahead, Oil rout extends, coronavirus, lockdown news eyed

Starting out a fresh week in Asia this Monday, the market mood remained cautious amid the continued rise in the coronavirus death toll globally while markets assessed the implications of the likely easing of the lockdown measures.

The sentiment was also tepid heading into a busy week of corporate earnings reports and critical economic data slated for release on both sides of the Atlantic that will reflect the virus impact.

The oil-price rout extended, as the rates hit the lowest levels since 1999 amid a gloomy demand growth outlook and looming oversupply concerns. Gold prices recovered losses and regained $1680 amid mixed Asian stocks and weaker US equity futures.

Across the fx space, broad-based US dollar recovery pressured most majors earlier on, although the kiwi outperformed towards Asia closing on New Zealand PM Jacinda Ardern’s upbeat remarks on the virus situation. The kiwi jumped nearly 50-pips to hit daily highs of 0.6060. The aussie also tracked the rebound in its OZ peers and trimmed losses to regain 0.6350. The People’s Bank of China’s (PBOC) rate cut announcement also somewhat helped the Antipodeans. USD/CAD rose 0.50% towards 1.4100 as oil prices collapsed.

Meanwhile, USD/JPY attempted a bounce but stayed well bid below 108.00. EUR/USD traded on the back foot below 1.0900 while the cable fell back below 1.2500.

Main topics in Asia

UK PM Johnson very cautious about easing lockdown – The Times

US Pres Trump: Getting close to a deal on additional stimulus, could have answered on Monday

NZ CPI Q1 +0.8 PCT vs pvs QTR 0.5% and +0.3 exp

Japan March Exports log biggest year-on-year decline since July 2016 – MOF Official

China reports 12 new coronavirus cases in Mainland on April 19 vs 16 a day earlier

US temporarily postpones certain tariff payments for 90 days

WTI oil price drops to lowest since 1999

PBoC sets 1-year loan prime rate at 3.85% vs 4.05%

Japan’s extra budget will be revised to around JPY25.6 trillion – Reuters

RBA’s Lowe: “If ever there’s a time to borrow, now is it”

US budget deficit to hit 19% of GDP in 2020

China’s Finance Ministry: Fiscal revenue fall was due to coronavirus outbreak and tax relief for firms

RBNZ Q1 Sectoral Factor Model Inflation Index rises by 1.7% YoY, Kiwi keeps lows

Japan’s Motegi: Cabinet decision on extra budget will come in the afternoon

NZ PM Ardern: Will move out of lockdown in a week

Key focus ahead        

It’s a quiet start to a busy week ahead, in terms of the economic news, as markets brace for the Euro area and US Preliminary Manufacturing PMI reports due later this week.

In Monday’s EUR calendar, the focus will be on Germany’s Bundesbank (Buba) Monthly Economic Assessment Report, given the virus led economic worries. In the meantime, the German Producer Price Index (PPI), Eurozone Current Account and Trade Balance data will keep the EUR, GBP traders entertained.

The US docket is also a thin-showing, with the second-liner Chicago Fed National Activity Index and Canadian Wholesale Sales data dropping in at 1230 GMT.

Apart from the macro data, the coronavirus-related updates worldwide, oil-price action and sentiment on the global stocks will continue to have a significant impact on the markets.

EUR/USD: Sidelined near 1.0860, analysts are bearish on single currency

EUR/USD is lacking a clear directional bias, having faced rejection at a crucial resistance on Friday. The EUR could be on the verge of a bigger drop as Eurozone stands divided on coronabonds. A severe shock to Eurozone’s growth could undermine the structure of the shared currency.

GBP/USD: Depressed below 1.2500 as UK struggles to combat coronavirus

GBP/USD fails to holds onto Friday’s recovery gains. UK PM Johnson very cautious about easing lockdown, under fire for missing initial cobra meetings. US death toll rises, President Trump hints another aid package.

Markets Outlook: Poor optics ahead as Covid-19 continues to dominate market attention

With the coronavirus continuing to dominate market attention, the focus this week will turn to the preliminary PMIs for April as investors try to gauge the extent of the economic disruption caused by the virus. 

 

Monday, Apr 13
24h

 

 

Friday, Apr 17
24h

 

 

Saturday, Apr 18
24h

 

 

Sunday, Apr 19
24h

 

 

Monday, Apr 20
06:00

 

-0.1%

-0.4%

06:00

 

0.2%

-0.1%

08:00

 

 

€34.7B

08:00

 

 

€8.7B

09:00

 

 

€17.3B

09:00

 

 

€1.3B

n/a

 

 

12:30

 

 

0.16

12:30

 

 

1.8%

15:30

 

 

0.28%

15:30

 

 

0.29%

22:30

 

 

52

Tuesday, Apr 21
01:30

 

 

05:00

 

 

06:00

 

3.2%

3.1%

06:00

 

3.8%

3.9%

06:00

 

3.0%

3.1%

06:00

 

21.0K

17.3K

06:00

 

 

3.5%

06:00

 

3,622M

3,573M

06:00

 

 

19,257M

06:00

 

 

15,684M

09:00

 

-30.0

-43.1

09:00

 

-43.0

-49.5

09:00

 

 

-49.5

 

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