The Asian equity markets tracked the record-run on Wall Street overnight while the sentiment remained upbeat amid fading China coronavirus fears and hopes of further fiscal and monetary stimulus from Beijing. A slowdown in new coronavirus cases and the factories resuming work in the world’s second-largest economy lifted the market mood.
Amongst the G10 currencies, the Australian dollar emerged as the strongest for the second straight session in Asia. The AUD/USD pair sustained the bounce above 0.6700, helped by stable Australian Business Conditions and risk-on. The safe-haven yen lost ground and sent USD/JPY closer to the 110 handle. The USD/JPY bulls cheered broad US dollar strength and gains in S&P 500 futures. Meanwhile, the traditional safe-haven, gold, snapped four-day winning streak and corrected below $1570.
The USD/CAD pair fell back below the 1.3300 level amid a risk-on rally in oil prices. The black jumped over 1% on short-covering. The EUR/USD pair meandered near a new four-month low reached in early trades at 1.0907 while the cable held on to the recovery mode above 1.2900 ahead of key event risks.
Main Topics in Asia
Coronavirus update: Death toll tops 1000
UK’s Javid to push for ‘permanent equivalence’ for City in Brexit talks – FT
US yield curve flirts with inversion on haven demand
US Pres. Trump: We should have a lower Fed rate right now
Australia: NAB business conditions weak but stable in January
White House: US Pres. Trump to visit India on Feb. 24-25 - Reuters
China’s HR Ministry: Overall jobs situation stable amid coronavirus outbreak
Coronavirus could trim 1 percentage point from China GDP growth – Govt think tank
Indonesia's Retail Sales drop 0.5% YoY in Dec, Rupiah keeps highs
UK shoppers still wary about spending in January - BRC
Officials: ECB review could be rushed to set an inflation goal by July – Bloomberg
Key Focus Ahead
Markets gear up for a busy economic calendar this Tuesday, as the UK Preliminary Q4 GDP and US Federal Reserve (Fed) Chairman Powell’s testimony will likely hog the limelight. The UK growth numbers are likely to hint towards a Bank of England (BOE) rate cut while investors will closely hear Powell’s take on the China coronavirus outbreak.
The UK data dump will drop in at 0930 GMT while at 1000 GMT, the European Commission will release its Economic Growth Forecasts.
The NA session lacks relevant macro data and therefore, the focus will remain on the European Central Bank (ECB) President Lagarde’s speech at 1400 GMT, which will be soon followed by Powell’s testimony before the Congress at 1500 GMT. The outgoing BOE Governor Carney’s address in the UK parliament will be also eyed at 1535 GMT.
Later in the American mid-morning, the speeches by BOE’s Haskel, Fed’s Quarles and Kashkari will also keep the traders busy amid incoming coronavirus updates.
EUR/USD: On a downward trajectory, Powell's testimony eyed
EUR/USD's recent slide from 1.1095 to 1.09 has put the bears in a commanding position. The pair formed a red "marubozu" candle last week, indicating a strong bearish sentiment. The focus will be on Fed Chairman Powell's take on coronavirus fallout.
GBP/USD: Modestly positive above 1.2900 ahead of UK GDP
GBP/USD holds the recovery above 1.2900 while heading into the London open. The UK data dump, Carney’s speech and Fed Chair Powell’s Testimony will be the key while coronavirus updates could keep filing the gaps.
UK GDP Preview: Stagnation may be good enough for pound bulls, three GBP/USD scenarios
Economists expect the UK to report stagnation in the fourth quarter of 2019. After several days under pressure, sterling may recover, especially if the economy ticks up. Outright recession risk may push the pound lower.
Federal Reserve Chairman Powell Testifies before Congress Preview: Pleased but wary
Federal Reserve Chairman Jerome Powell will testify before the House Committee on Financial Services in the Fed’s Semiannual Monetary Policy Report to Congress on Tuesday.
FXStreet Indonesian Site - new domain!
Access it at www.fxstreet-id.com
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD retreats toward 1.0650 after PMI-inspired rebound
EUR/USD loses traction and retreats to the 1.0650 area after rising toward 1.0700 with the immediate reaction to the upbeat PMI reports from the Eurozone and Germany. The cautious market stance helps the USD hold its ground ahead of US PMI data.
GBP/USD fluctuates near 1.2350 after UK PMIs
GBP/USD clings to small daily gains near 1.2350 in the European session on Tuesday. The data from the UK showed that the private sector continued to grow at an accelerating pace in April, helping Pound Sterling stay resilient against its rivals.
Gold flirts with $2,300 amid receding safe-haven demand
Gold (XAU/USD) remains under heavy selling pressure for the second straight day on Tuesday and languishes near its lowest level in over two weeks, around the $2,300 mark in the European session. Eyes on US PMI data.
Here’s why Ondo price hit new ATH amid bearish market outlook Premium
Ondo price shows no signs of slowing down after setting up an all-time high (ATH) at $1.05 on March 31. This development is likely to be followed by a correction and ATH but not necessarily in that order.
US S&P Global PMIs Preview: Economic expansion set to keep momentum in April
S&P Global Manufacturing PMI and Services PMI are both expected to come in at 52 in April’s flash estimate, highlighting an ongoing expansion in the private sector’s economic activity.