A sense of caution prevailed across the financial markets in Asia this Tuesday, in the face of the renewed US-China conflict over the latter’s coronavirus response. US President Donald Trump faulted China for the virus spread and said that his administration was conducting “serious investigation” into the issue.
Further, the ongoing slump in oil prices also dampened the investors’ sentiment. These catalysts negated the optimism surrounding the lockdown easing plans in some of the major economies. Amid worsening market mood, the US dollar regained poise against its main rivals while Gold prices tumbled 1% and breached the 1700 level.
The Asian stocks traded mixed, with the Japanese indices the main laggard. The US equity futures traded with moderate losses. Meanwhile, the US oil tanked over 13% and headed back towards the $10 handle amid persisting storage concerns and a lack of physical demand.
Across the fx board, USD/JPY ranged within a 15-pips band around 107.25/30. The Antipodeans witnessed steep declines amid a broadly firmer dollar and brewing US-China tensions. NZD/USD slid 0.80% to near the 0.5990 region on talks about RBNZ considering negative interest rates. The aussie followed suit and surrendered the 0.6450 level. The losses in commodities also added to the downside in the commodity-currencies. USD/CAD rose 0.30% and regained 1.4050.
Among the European currencies, EUR/USD remains pressured around 1.0820, keeping its range play intact. The cable corrected from weekly highs and tested the 1.24 handle.
Main topics in Asia
US President Trump: All parts of the country are either in good shape or in all cases getting better
China reports 6 new coronavirus cases in the mainland as of end-April 27
WTI put options for June trade at negative price
Global COVID-19 cases have topped 3 million – Johns Hopkins University.
NZ PM Ardern: Urges people to remain vigilant and to stay at home if possible
BOJ to increase size of JGB purchases across all its maturities
USD/KRW Price Analysis: South Korean won slips from multi-day tops, eyes $1,230
Australia’s Treasury: Not working on any new economic packages at moment
China Gold Association: Gold consumption fell 48.2% YoY in Q1
US Pres. Trump committed the crime of dereliction of duty, has superb lying skills – Global Times
Coronavirus update: Germany’s new infections, deaths rise for first time in five days
Key focus ahead
Yet another of scarce EUR calendar, with nothing of note except for the UK CBI Distributive Trade Survey – Realized for April, due at 1000 GMT. Therefore, the dollar dynamics and market sentiment will continue to play out.
From the NA docket, the US Conference Board Consumer Confidence data slated for release at 1400 GMT will stand out while the Good Trade Balance and some regional reports will be also eyed for some fresh trading incentives. The American Petroleum Institute’s (API) Weekly Crude Oil Stocks data, dropping in at 1700 GMT, could offer near-term opportunities for oil traders.
Markets await the monetary policy decisions from both the FOMC and ECB due later this week, in the wake of the coronavirus pandemic.
EUR/USD sees bull-bear tug-of-war
The EUR/USD bulls and the bears are fighting it out in the newfound trading range of 1.0727 to 1.0860. A breakdown would expose the 2020 low of 1.0636. European governments have left the ECB alone in the fight against coronavirus.
GBP/USD: US dollar pullback, UK’s pandemic fears snap four-day winning streak
GBP/USD steps back from the weekly top and trades close to 1.2400 ahead of the London open. While the USD’s return on the bulls’ radar can be considered as a primary reason for the pullback, fears of the UK’s coronavirus resurgence also weigh on the pair.
WTI Price Analysis: Bears eye contract low, $10 at risk
WTI bears aim for $10.00 after more than 13.00% losses. A two-day-old falling trend line, 23.6% Fibonacci retracement can offer immediate support. Buyers will wait for a sustained break above $13.00 for fresh entries.
US Conference Board Consumer Confidence April Preview: Jobs, jobs, jobs
Consumer confidence predicted to reach a six-year low. Unemployment driving outlook toward recession levels. Michigan consumer sentiment lowest since December 2011.
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