Thursday was another chaotic session, with the US$ Index (DXY) reaching a 3 year high and with WTI recording its best day ever (+24%), while the stock markets had a volatile ride, although by recent activity it they were relatively stable and closed mostly higher, between +0.5% (S+P) and 2.5% (Nasdaq).
The dollar reached new highs as demand for cash continued at a time when investors are concerned about potential liquidity issues, despite the latest efforts from the Fed to calm investor fears. The commodity currencies took a major dive yesterday, particularly after the RBA moved to cut rates, but have since recovered some lost ground, while in the US session it was the turn of the Euro to come under pressure in dropping 200bp as the coronavirus issue in Europe continues to accelerate. The Jpy and the Chf were sold heavily as the stock markets recovered, diminishing safe haven-demand, while Sterling was volatile but remains near levels seen 24 hours ago.
Stockmarkets managed to post gains on Thursday in both Europe and in the US, halting the recent steep losses as policymakers around the world took further emergency actions to try to help financial markets cope with the current economic damage from the coronavirus.
Oil prices rebounded from their lowest level in 18 years, with their largest one-day percentage gain on record, extending the recent turbulent price action as the price war between Saudi Arabia and Russia ripples around the world.
Gold and Silver were volatile but ended more or less unchanged on the day.
The main event for Friday will be the monthly rate setting due from China at which the PBOC seem likely to announce a small easing move in order to prop up the collapsing economy. Elsewhere the calendar is more or less empty, with just the German PPI(exp -0.1%mm) and the UK Public Sector Net Borrowing Requirements (exp GBP 0.85bio – February) due from Europe, while the US will see the February Existing Home Sales (exp +0.7%mm). Have a good weekend.
Economic data highlights will include:
Fri: China Interest Rate Decision, NZ Credit Card Spending, German PPI, EU Current Account, UK Public Sector Net Borrowing Requirements, Consumer Inflation Expectation, BOE Quarterly Bulletin, US Existing Home Sales,
Market moves, in brief:
FX: DXY 102.70 (+1.75%)
Bonds: US10Y; 1.144% (-3.71%), German 10Y; -0.197% (+13.70%), UK 10Y; +0.717% (-10.09%), Australian 10Y; 1.490% (+23.25%), NZ 10Y; 1.780% (+2.040 %), China 10Y; 2.771% (-0.42%)
Stock Indices: DJI; +0.95%, S+P; +0.47%, NASDAQ; +2.30%, EUStoxx50; +2.85%, FTSE100; +1.40%, Shanghai Composite; -0.98%, ASX200: +3.01%
Metals: Gold $1472 oz (-0.91%), Silver $12.10 oz (+0.97%), Copper $2.153 lb (+0.09%), Iron Ore $89.97 per tonne (NYMEX) (-0.52%),
Oil: WTI $27.68 pb (+23.96%)
|INDICES / COMMODITIES|
|1 Hour||Down – Oversold||Up – Overbought||Turning Neutral||Possible Topping Formation||Turning Neutral||Turning Neutral|
|4 Hour||Down||Turning Higher||Possible Basing Formation||Up||Oversold – Turning higher?||Neutral – Turning Higher?|
|1 Week||Neutral – Turning Lower?||Neutral||Turning Lower?||Neutral – Turning Higher?||Down||Turning Lower|
|1 Hour||Possible Topping Formation||Turning Neutral||Turning Neutral||Turning Neutral||Neutral – Turning Higher?||Neutral – Turning Higher?|
|4 Hour||Up||Bullish Divergence||Bullish Divergence||Turning Neutral||Turning Higher?||Bullish Divergence|
|1 Day||Up||Down – Oversold||Down – Oversold||Down||Down||Down – Oversold|
|1 Week||Neutral – Turning Higher?||Down||Down||Turning Lower||Neutral – Turning Lower?||Down|
|1 Hour||Turning Neutral||Possible Basing Formation||Possible Basing Formation||Possible Topping Formation||Possible Basing Formation||Turning Neutral|
|4 Hour||Turning Neutral||Turning Lower||Turning Lower||Oversold – Turning higher?||Turning Lower?||Turning Higher|
|1 Day||Turning Neutral||Up||Possible Topping Formation||Down||Up||Turning Neutral|
|1 Week||Neutral||Neutral – Turning Higher?||Neutral – Turning Higher?||Down||Up||Turning Lower?|