Notes/Observations

- Global yield rise as Govt prepare stimulus response to virus outbreak

- US Treasury Mnuchin comments on unemployment rattled markets overnight

 

Asia:

- Japan Feb Trade Balance registers its largest surplus since 2007 at : ¥1.11T v ¥93Te; Exports Y/Y: -1.0% v -4.2%e; Imports Y/Y: -14.0% v -14.0%e

 

Coronavirus:

- Global cumulative 198,083 (+15,677); cumulative deaths 7,954 (+800)

- China cumulative: 81,163 (+46); cumulative deaths 3,242 (+11)

 

Europe:

- EU officials confirm national leaders had agreed to close external borders to prevent coronavirus spread. The restrictions will apply to all non-EU citizens and last for an initial 30 days

- Italy PM Conte said to have raised idea for joint EU debt issuance at recent EU Leaders meeting. German Chancellor Merkel noted that Fin Min Scholz could explore the proposal with other ministers.

- Italy market regulator CONSOB banned short selling and introduced temporary enhanced disclosure requirements on investors' holdings in 48 Italian firms

- UK Chancellor of the Exchequer (Fin Min) Sunak: £330B guaranteed loans to be made available to businesses, agreed new lending facility with BoE to provide low cost, easily accessible commercial paper

- BOE said to have held call with top asset managers, some of whom argued that financial markets should be closed for two weeks, but most did not support market closure. Asset managers gave a "grim" assessment of the credit markets and urged central bankers to take additional measures. Participants included JP Morgan, Blackrock, and Vanguard

 

Americas:

- Treasury Sec Mnuchin stated that Proposal would inject $1T into economy on top of $300B in deferred tax payments; this is not the time to worry about the deficit. Also said to have warned that the coronavirus could lead to a 20% unemployment rate without any action by the government

 

Mid-East/ Energy:

- Weekly API Crude Oil Inventories: -0.4M v +6.4M prior

 

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices [Stoxx600 -3.72% at 280.18, FTSE -4.71% at 5,045.30, DAX -4.64% at 8,524.50, CAC-40 -4.15% at 3,826.31, IBEX-35 -2.60% at 6,328.00, FTSE MIB -0.72% at 15,204.50, SMI -3.73% at 8,176.50, S&P 500 Futures -3.71%]

Market Focal Points/Key Themes: European indices open down across the board and continued lower as the session wore on; Italy closes short selling for 90 days, Greece until April 24th; financial sector among leaders to the downside; crude hits 17-year low weighing on energy sector; France FinMin said could nationalize companies as necessary; regulators held discussions about closing equity markets, but have not agreed to do so yet; several governments offer stimulus; upcoming earnings expected in US session include General Mills and Alliance Data Systems

 

Equities

- Consumer discretionary: WM Morrison Supermarkets [MRW.UK]+7% (earnings; comments on UK decision), Restaurant Group [RTN.UK] -6% (trading update)

- Industrials: BMW [BMW.DE] -7%, Daimler [DAI.DE] -4% (BMW guidance update)

- Technology: Superdry [SDRY.UK] -14% (unable to meet FY20 guidance)

 

Speakers

- ECB issued a statement that reiterated it stood ready to use all measures as appropriate (clarified earlier comments from member Holzman who stated that monetary policy had reached its limits)

- ECB's De Guindos (Spain): Would like to see a single EU fiscal response. ECB was prepared to act with bold measures; could purchases debt with flexibility. Had tools at its disposal which were more effective than acting on monetary polic. Believed the eEffect from coronavirus outbreak would likely to be temporary; situation was different from 2008

- ECB's Holzmann (Austria) retracted an earlier comment and clarified that monetary policy had NOT reached its limits and the monetary toolbox was well equipped

- Sweden Central Bank (Riksbank) Gov Ingves stated that cutting Repo Rate by 25bps (into negative territory) would not work miracles. The current Repo Rate level of 0.00% (zero) was a very low level

- Iceland Central Bank (Sedibanki) Policy Statement noted that the coronavirus pandemic to have negative impact on economy and financial conditions. Domestic economy and financial system were both well prepared to face shocks but MPC Committee would use policy instruments at its disposal in order to mitigate the adverse impact of the shock

- UK Treasury Sec Barclay stated it would do whatever it took to support the economy; must support businesses and keep people in jobs. Govt was working with BOE on economic support

- Spain PM Sanchez stated that he saw a rapid recovery in the post-virus environment

- France Fin Min Le Maire: Could nationalize companies if necessary

- Greece Fin Min Staikouras: 2020 GDP growth seen flat (**Note: cuts expectations; prior view was for 2.8% growth)

- Germany Financial regulator (Bafin) cut the counter cyclical buffer from 0.25% to 0.00% (to zero); effective Apr 1st with measures to run at least through December

- Germany RKI Institute said to see exponential growth of COVID-19; could see 10M inflections in the country if rules not followed. Next two weeks would be key

- Japan PM Abe: To put together an ample economic package to combat the coronavrius outbreak

 

Currencies/ Fixed Income

- The USD was mixed in the session. Dealers noted that the typical risk aversion flows were not exhibited in the session as global equity markets remained soft. Instead global yields rose as equity prices slumped as governments began preparing the massive stimulus packages to combat the economic impact of the coronavirus outbreak. The 10-year Italy/German Gov't bond

spread was approaching 320bps in the session.

- US 10-year at 1.19%, higher by over 10bps

- German 10-year Bund at -0.24%, higher by almost 20bps

- French 10-year Oat at 0.47%, higher by 25bps

- Italy 10-year BTP at 2.92%, higher by over 55bps

- The major FX pairs saw EUR/USD holding at the 1.10 level while USD/JPY moved back above the 107 handle to offset the earlier risk aversion flow in late Asia that favored the yen.

 

Economic Data

- (EU) EU27 Feb New Car Registrations: -7.4% v -7.5% prior (2nd straight decline)

- (AT) Austria Feb CPI M/M: +0.2% v -0.5% prior; Y/Y: 2.2% v 2.0% prior

- (ZA) South Africa Feb CPI M/M: 1.0% v 0.8%e; Y/Y: 4.6% v 4.5%e

- (ZA) South Africa Feb CPI Core M/M: 1.2% v 1.1%e; Y/Y: 3.8% v 3.7%e

- (IS) Iceland Central Bank (Sedibanki) cuts 7-Day Term Deposit Rate by 50bps to 1.75% (2nd policy move in March)

- (PL) Poland Feb Employment M/M: 0.1% v 0.1%e; Y/Y: 1.1% v 1.1%e

- (PL) Poland Feb Average Gross Wages M/M: 0.9% v 0.2%e; Y/Y: 7.7% v 7.0%e

- (IT) Italy Jan Industrial Sales M/M: +5.3 v -2.8% prior; Y/Y: +3.8 v -1.5% prior

- (IT) Italy Jan Industrial Orders M/M: 1.2 v 1.3% prior; Y/Y: -1.8 v -5.7% prior

Fixed Income Issuance- (DK) Denmark sold total DKK260M in 2022 and 2029 DGB bonds

- (IN) India sold total INR120B vs. INR120B indicated in 3-month, 6-month and 12-month bills

 

Looking Ahead

- (UK) Second round of Brexit discussions in London

- (CO) Colombia Feb Consumer Confidence Index: No est v -1.2 prior

- (AR) Argentina Feb Leading Indicator: No est v 0.3% prior

- 06:00 (EU) Euro Zone Feb Final CPI Y/Y: 1.2%e v 1.2% advance; CPI Core Y/Y: 1.2%e v 1.2 % advance; CPI M/M: 0.2%e v 0.2% advance

- 06:00 (EU) Euro Zone Jan Trade Balance (Seasonally Adj): €19.2Be v €22.2B prior; Trade Balance NSA (unadj): No est v €23.1B prior

- 06:00 (CY) Cyprus Feb CPI Harmonized M/M: No est v -0.8% prior; Y/Y: No est v 0.7% prior

- 06:00 (IT) Italy Jan Total Trade Balance: No esty v €5.0B prioir; Trade Balance EU: No est v -€0.8B prior

- 06:00 (IT) Italy Debt Agency (Tesoro) bond exchange auction

- 06:30 (DE) Germany to sell €1.5B in 0% Aug 2050 Buxel bond

- 06:30 (PT) Portugal Debt Agency (IGCP) to sell €1.25-1.5B in 6-month and 12-month bills

- 06:30 (EU) ECB 3rd allotment in its TLTRO-3 Operation

- 07:00 (FI) Finland to sell €1.0B in 2024 RAGB bonds

- 07:00 (US) MBA Mortgage Applications w/e Mar 13th: No est v 55.4% prior

- 07:00 (BR) Brazil Mar IGP-M Inflation (2nd Preview): 0.2%e v 0.0% prior

- 07:00 (PT) Portugal Feb PPI M/M: No est v 0.1% prior; Y/Y: No est v 1.9% prior

- 07:00 (ZA) South Africa Jan Retail Sales M/M: +1.0%e v -3.1% prior; Y/Y: 0.0%e v -0.4% prior

- 07:30 (CL) Chile Q4 GDP Q/Q: -3.5%e v +0.7% prior; Y/Y: -1.8%e v +3.4% prior (revised from 3.3%)

- 07:30 (CL) Chile Q4 Current Account Balance: No est v -$3.2B prior

- 08:00 (UK) Weekly PM question time in House of Commons

- 08:30 (US) Feb Housing Starts: 1.500Me v 1.567M prior; Building Permits: 1.500Me v 1.550M prior (revised from 1.551M)

- 08:30 (CA) Canada Feb CPI M/M: 0.4%e v 0.3% prior; Y/Y: 2.1%e v 2.4% prior; CPI Core- Median Y/Y: 2.2%e v 2.2% prior; CPI Core- Common Y/Y: 1.8%e v 1.8% prior; CPI Core- Trim Y/Y: 2.1%e v 2.1% prior; Consumer Price Index: 137.4e v 136.8 prior

- 08:30 (CA) Canada Feb Teranet House Price Index (HPI) M/M: No est v 0.1% prior; Y/Y: No est v 2.1% prior; House Price Index (HPI): No est v 228.6 prior

- 09:00 (RU) Russia Feb PPI M/M: 0.0%e v 0.9% prior; Y/Y: -0.9%e v -0.7% prior

- 09:00 (UK) Daily Baltic Dry Bulk Index

- 10:30 (US) DOE Weekly Crude Oil Inventories

- 17:00 (BR) Brazil Central Bank (BCB) Interest Rate Decision: Expected to cut Selic Rate by 25bps to 4.00% (from 4.25%)

- 17:45 (NZ) New Zealand Q4 GDP Q/Q: 0.5%e v 0.7% prior; Y/Y: 1.7%e v 2.3% prior

- 19:30 (JP) Japan Feb National CPI Y/Y: 0.5%e v 0.7% prior; CPI Ex Fresh Food (core) Y/Y: 0.6%e v 0.8% prior; CPI Ex-Fresh Food/Energy (core-core) Y/Y: 0.7%e v 0.8% prior

- 20:30 (AU) Reserve Bank of Australia (RBA) Bulletin

- 20:30 (AU) Australia Feb Employment Change: +6.3Ke v +13.5K prior; Unemployment Rate: 5.3%e v 5.3% prior; Full Time Employment Change: No est v +46.2K prior; Part Time Employment Change: No est v -32.7K prior; Participation Rate: 66.1%e v 66.1% prior

- 21:05 (NZ New Zealand to sell NZD150M in 2.75% 2037 Bonds

- 23:30 (AU) RBA Interest Rate Decision

All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis


Latest Forex Analysis

Editors’ Picks

AUD/USD: Bears attack 0.7700 ahead of China GDP

AUD/USD extends Friday’s downbeat momentum towards the 0.7700 threshold at the start of Monday’s Asian session. The Aussie pair declined the most since late October the previous day as the US dollar benefitted from the risk-off mood.

AUD/USD News

GBP/USD: Further restrictions in the UK may hit the pound

The GBP/USD pair trimmed most of its weekly gains on Friday and settled in the 1.3580 price zone, amid risk-off fueling dollar’s demand. UK GDP contracted by less than anticipated in November, Industrial Production plunged.

GBP/USD News

Gold: Further decline toward $1,800 remains on the cards

Gold failed to stage a convincing rebound this week. After losing more than 2% in the previous week, the XAU/USD pair extended its slide on Monday and touched its lowest level since early December at $1,817. 

Gold news

Darkest before dawn

The upcoming economic news is likely to be dreadful, and if it is not dreadful, it will be mostly ignored. This includes the release of the preliminary January PMI figures at the end of the week. Japan is extending its national emergency to another five prefectures, which collectively account for over half of the nation's GDP.

Read more

DXY breaks above key downtrend, eyes move above 91.00

USD has been strongly supported on what has shaped up to be a very much risk off final trading day of the week. Most G10/USD pairs have seen significant weakness, aside from CHF/USD and JPY/USD, given that the two currencies are also considered “safe havens”.

US Dollar Index News

Forex Majors

Cryptocurrencies

Signatures