Flight to safety still remained in vogue in the Asian session this Thursday, following the Wall Street slump triggered by President Donald Trump’s warning over the coronavirus situation in the US. The US dollar and gold benefited from the risk-off action in the Asian equities while investors also sought cover in the US bonds, having knocked-off the US Treasury yields sharply lower across the curve.
Across the fx board, the anti-risk yen suffered losses despite risk-aversion, as USD/JPY rebounded from a two-week low, tracking the rally in the US equity futures. The Aussie reported mild recovery gains but remains capped below 0.6100 while the Kiwi outperformed and jumped back beyond 0.5900 after the Reserve Bank of New Zealand (RBNZ) announced the suspension of the bank dividend payments. The Canadian dollar also enjoyed some gains on the oil-price rebound, with USD/CAD back around mid-1.41s.
EUR/USD and GBP/USD traded mixed, with the Fiber pressured below 1.0950 while the latter better bid near 1.2400. Meanwhile, the Swiss franc fell sharply vs. the US dollar ahead of the Swiss Consumer Price Index (CPI) data.
Main topics in Asia
Fed eases supplementary leverage ratio requirements for one year
NSW police says lockdown orders will last 90 days as national cases near 5,000 – The Guardian
WH Adviser O’Brien: US will work with world’s largest oil producers to address volatility
Asian shares drowning in Wall Street’s sea of red
US Treasury to tap Wall Street advisory firms on airline aid – WSJ
Moody’s cuts its outlook for Australia’s banking system to negative from stable
Central banks dumped over $100 billion of US treasuries in three weeks to March 25
Australian PM Morrison: We are slowing the spread of the coronavirus
Trump administration agree on new ways to control high tech exports to China – Reuters
WHO’s Tedros: Coronavirus cases and deaths rising, debt relief needed for poorest nations
Mexican Finance Ministry: Govt expects GDP growth for 2020 between -3.9% and 0.1%
US Jobless Claims to show a rise of another 5.5 million this Thursday – Goldman Sachs
Key focus ahead
Broad risk sentiment will continue to drive the markets, in the wake of incoming coronavirus stats globally and further stringent measures adopted by major governments. On the data front, however, the US Jobless Claims report will hog the limelight at 1230 GMT, in the face of the respiratory illness-led impact on the US employment scenario.
The EUR docket has nothing of note to offer, except for the Eurozone Producer Price Index (PPI), due at 0900 GMT. In the NA calendar, the Canadian Trade data and Factory Orders data from the US will be also closely eyed for fresh trading incentives.
EUR/USD: Dollar remains bid as coronavirus reigns
The US dollar draws haven bids, keeping EUR/USD under pressure. COVID-19 continues to spread, intensifying fears of deeper economic contraction. The US initial jobless claims data may bolster risk-off.
GBP/USD struggles for clues, focus on US Jobless Claims, coronavirus
Amid a lack of fresh catalysts, GBP/USD keeps eyes on the coronavirus (COVID-19) clues while flashing mild gains below 1.24 during the pre-London open trading. In addition to the virus headlines, the US Jobless Claims will also be the key to follow.
US Initial Jobless Claims Preview: The tidal wave rolls on
Claims expected to be another record after last week’s 3.283 million. Continuing claims projected to jump to the highest since January 2010. Safety dollar could benefit from fear of deepening slowdown.