Breaking: Stocks, gold bounce, dollar falls as Fed kicks off $500 billion injections, QE vs. coronavirus
|The NY Fed will Offer $500 Bln in a three-month repo operation at 1:30 PM Eastern . that will settle On March 13, 2020. The move comes in response to the extraordinary conditions inflicted by the coronavirus crisis.
The Federal Reserve's move is across a range of maturities, meaning it is more meaningful than the previous operations in markets dating to September 2019. It is outright Quantitative Easing (QE).
Stocks recover from the lows, with the S&P 500 jumping from 2,500 to above 2,600 points.
The US dollar retreats from the highs and also gold tops $1,600.
Here is the part of the statement:
These changes are being made to address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak. Reserve management purchases into the second quarter will continue to be conducted with this maturity allocation. The terms of operations will be adjusted as needed to foster smooth Treasury market functioning and efficient and effective policy implementation.
EUR/USD is bouncing above 1.11, GBP/USD has touched 1.26, USD/CAD is down from 1.39 to 1.37, and AUD/USD is rising toward 0.63.
Here is how the move looks on the euro/dollar chart:
The world's most powerful central bank is acting and politicians also need to do their share.
See: Market crash, dollar surge, are only the beginning If leaders fail to act
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