WTI: On the recovery mode above $31.00, coronavirus, central bankers in focus

While coronavirus woes and surprise actions from the Fed and RBNZ triggered the early-day declines of WTI, expectations of further liquidity infusion seem to favor the recent short-covering moves to 31.40, -5.60%, during Monday’s Asian session.

The Fed surprised global markets with the second in a month rate cut, coupled with $700 billion worth of Quantitative Easing (QE), during the early-Asia. Earlier, the RBNZ finally joined the league of major central banks to ward off negative implications of the coronavirus (COVID-19) by slashing benchmark rates to 0.25%.

As if the RBNZ and Fed-led action wasn’t enough, the BOJ announced to hold an emergency meeting at 03:00 GMT. It wouldn’t be any surprise if the Japanese central bank also announces monetary policy reactions to the virus.

That said, coronavirus risk continues to loom over the global financial markets. In its latest update, Fitch said that coronavirus containment actions pose a material risk to global structured finance.

The pandemic has already pushed CME and CBOE to close the floor trading while the latest numbers from Italy and Spain have been worrisome. Further, cases in Asia, except China, have been on the spike with economies like India gaining a place in the list of virus-infected countries.

Elsewhere, Russia keeps the Organization of the Petroleum Exporting Countries (OPEC) on its toe while refraining to extend the production cuts whereas Saudi Arabia floods the market with less-priced oil. On the data front, inventories are rising while Oil Rig Counts rose from 682 to 683 in the latest update

Technical Levels