Friday's nasty stock-market reversal was the most interesting we've seen in a long while. The ostensible cause of the selloff was mounting anxiety over the spread of the deadly coronavirus from China to the U.S. and elsewhere. Three cases have been reported so far in the U.S. and 2,000 worldwide, and although no one seems to expect a major outbreak in North America, it's not hard to imagine a mere handful of new cases hobbling, for starters, the airline industry and an import/export sector that was expected to revive because of the recent trade deal. The spread of the disease in China may already have derailed the country's tepid economic recovery, with a corresponding impact on energy markets that took a beating last week.
Heedless Buyers
I'd written here on Friday that it would take a lot more than a virus to kill a U.S. bull market that has been powered by reckless buying. But we shouldn't dismiss the possibility that coronavirus could turn out to be the black-swan event that investors knew would arrive eventually. The heavy selling that ended the week was noteworthy because it was accompanied by bullish breakouts in the Dollar Index and T-Bonds. Although it is difficult to predict exactly what this may portend, it is safe to say that if the respective uptrends in these massive markets gain momentum over the next week or two, a major tone change for financial markets and the global economy could lie in the offing.
Rick’s Picks trading ‘touts’ are for educational purposes only. Past performance is no guarantee of future performance. (See full disclaimer at https://www.rickackerman.com/)
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Editors’ Picks
AUD/USD remains under pressure above 0.6400
AUD/USD managed to regain some composure and rebounded markedly from Tuesday’s YTD lows in the sub-0.6400 region ahead of the release of the Australian labour market report on Thursday.
EUR/USD faces decent contention around 1.0600
The knee-jerk in the Greenback reignited some buying interest in the risk complex and pushed EUR/USD to three-day highs near 1.0680, rapidly leaving behind the recent yearly low around 1.0600.
Gold eases despite risk-off mood
Gold trades in a relatively tight range near $2,390 in the second half of the day on Wednesday. In the absence of high-tier data releases, investors keep a close eye on headlines surrounding the Iran-Israel conflict.
Ethereum trades around the $3,000 support following a surge in validator queue
Ethereum (ETH) continued a sideways movement on Wednesday as investors seemed to be waiting for an upward or downward price catalyst. Despite the price stagnancy, the ETH validator queue - possibly fueled by the DeFi restaking boom - rose sharply.
Australia unemployment rate expected to rise back to 3.9% in March as February boost fades
Australia will publish its monthly employment report first thing Thursday. The Australian Bureau of Statistics is expected to announce the country added measly 7.2K new positions in March after the outstanding 116.5K jobs created in February.