Markets fear disease - ANZ

Ross J Burland FXStreet

In recent trade, global markets have reacted negatively to news of virus spreading in China while US markets also took into account the gloomy IMF report after being closed the previous day. Analysts at ANZ bank explained:

Key quotes

"The outbreak of a new coronavirus in China which is related to SARS has global financial markets shuddering. The disease which was first detected in Wuhan, in the Hubei province west of Shanghai, has officially claimed six lives but there are fears the scale of the outbreak may be considerably larger as China initially covered up the seriousness of the SARS outbreak in 2002-03.

The disease which is now known to spread through human contact is disrupting Chinese New Year travel plans. Cases have been confirmed in many other places including Beijing, Guangdong, Japan and Thailand. The World Health Organisation will meet later today to consider declaring a global health emergency."

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

USD/JPY: Japanese Yen tumbles as Fed signals higher rate path

The Japanese Yen depreciated against the US Dollar on Wednesday after the US Federal Reserve delivered a hawkish hold, with most officials expecting one rate hike towards the end of the year, while the new Fed Chair, Warsh, reiterated the Fed’s commitment to achieving the 2% inflation goal. At the time of writing, the USD/JPY trades at 160.66 after bouncing off the daily low of 160.11.

AUD/USD benefits from softer USD as US-Iran deal counters Fed's hawkish tilt

AUD/USD edges higher during the Asian session on Thursday as the US Dollar retreats from its highest level since late March, touched in reaction to the Fed's hawkish tilt the previous day. The US and Iran signed a MoU aimed at ending the war and reopening the Strait of Hormuz, boosting investors' confidence and undermining the safe-haven USD. Furthermore, the RBA's signal that additional rate hikes remain possible, if inflation persists, acts as a tailwind for the Aussie.

Gold slumps to near $4,250 as Fed holds rates but flags potential hike this year

Gold price tumbles to around $4,280 during the early Asian session on Thursday. The precious metal faces some selling pressure after the US Federal Reserve decided to hold its benchmark interest rate steady but signaled a hike in borrowing costs later this year.

Bitcoin remains under bearish pressure despite recent rebound — Glassnode

Bitcoin remains well below key onchain metrics, with realized losses continuing to dominate capital flows despite a partial price recovery. The top crypto rebounded from lows near $60,000 to the $65,000 range after the US-Iran peace deal reversed much of the war premium that had weighed on risk assets.

The next big AI trade may not be about chips or software

Artificial intelligence has already created some of the biggest winners in modern market history. Chipmakers have surged, data centre construction is booming, and electricity demand forecasts are changing globally.

Why a hawkish RBA is no longer enough to lift the Australian Dollar

The Reserve Bank of Australia delivered more than what markets expected: a hawkish hold that should have supported the Aussie. But markets widely ignored it, focusing instead on slowing economic growth and proving that central bank messaging alone isn’t always enough to drive currencies.