PBoC Delivers a Fix for the Yuan and Creates a Brief Market Bull Run [Video]

China's central bank has set the yuan fixing below $7 for the first time in over 10 years, delivering a bit of a fix for markets globally as investors swung back toward risk assets. EU bourses recovered some of the strong losses recorded earlier this week.

China's daily fixing has become a widely and closely watched event this week after a sudden weak reference rate on Monday which essentially triggered the biggest loss in the yuan since 2015 and sparked concerns that a global currency war was already underway.

Central Banks Turn Dovish

After the RBNZ several other central banks such as in India or Thailand cut their rates yesterday surprisingly confirming the global overall trend of dovish turnarounds. Investors will now focus on the U.S. Federal Reserve and how it chooses to respond to the whole U.S./China debacle 

China Reports Strong Earnings

China reported stronger than expected exports overnight, which also grew the trade balance deficit with the U.S. which in turn may cause Donald Trump to shock markets with tweets again later today. Markets will remain quiet on the data front as the week concludes but we can expect some key earnings with key players such as Adidas, Aviva, Zurich Insurance Group and United Corporations reporting today. 

USD Steadies, Awaiting Input 

The dollar is still not moving much into any one direction as it awaits new input. The EUR/USD is stuck at the 1.12 level, however with German industrial production yesterday strongly lower, the European economy appears to be quite fragile, even in Germany, which is not a good sign for EUR bulls.

 

Gold Corrects, Oil Recovers

Gold prices corrected today after topping the $1,500 mark in the previous session, as central banks around the world slashed interest rates amidst fears of a global recession. Elsewhere, oil futures jumped more than $1.5 a barrel on Thursday, recovering half of the nearly 5% losses in the previous session,  following Saudi official statements that they want to do anything they can to stop the slide in oil prices.

Bitcoin Struggling to Claim the 12K Level

Bitcoin topped $12,000 for the second time in three days yesterday as risk assets fell on fears of a global recession, but failed to sustain the key 12K mark. BTC is currently struggling to claim the 12k level after repeated attempts and needs to conquer this level so that it does not risk another drop from here.