Forex news from the European morning session - 24 March 2020
Headlines:
- Singapore to shut bars, cinemas; suspend religious services
- Australia PM Morrison says to extend social restrictions
- Heads up: ONS to change market-sensitive UK economic data releases to 0700 GMT starting 25 March
- S&P 500 futures hit limit-up band of 2,333.50
- UK March flash services PMI 35.7 vs 45.0 expected
- Japan's "whale" to boost ratio of foreign bonds in its portfolio by 10%
- Eurozone March flash services PMI 28.4 vs 39.5 expected
- Germany March flash manufacturing PMI 45.7 vs 39.9 expected
- France March flash services PMI 29.0 vs 40.0 expected
- ECB's Villeroy says central bank to intervene in commercial paper market this week - interview
- Gold acted as a leading indicator for stock's recovery in 2008/09
- Thailand to declare state of emergency on 26 March
- Hubei province says to remove travel restrictions on leaving Wuhan on 8 April
- US Congress stimulus package - "progress," but say some issues still under review
Markets:
- GBP leads, USD lags on the day
- European equities higher; S&P 500 futures hit limit-up
- US 10-year yields up 1 bps to 0.80%
- Gold up 3% to $1,602
- WTI up 3.1% to $24.10
- Bitcoin up 4.7% to $6,717
Dollar weakness is among the key themes in the market today, as the lack of perceived funding pressures is helping investors breathe easier to start the day.
Equities are rallying sharply since Asia Pacific trading as the market took kindly to the Fed backstopping the US economy and launching unlimited QE.
That set off a wave of dollar weakness, which only grew in European trading as stocks continue to outperform with S&P 500 futures even hitting its limit-up band.
The story for dollar pairs - except against the yen - is all pretty much the same as we see the greenback lose ground and surrender near-term control, with dollar pairs now sitting in between both their key hourly moving averages.
EUR/USD rose from 1.0780 to 1.0888 in search of a key daily break above 1.0778 and 1.0800, while GBP/USD raced higher from 1.1600 to 1.1790 before settling around 1.1750.
AUD/USD also moved up from 0.5900 to 0.5975 but near-term resistance continues to lock the pair down for the time being.
In other asset classes, gold continues to outperform as it touches the $1,600 level before backing off slightly. While bonds kept more steady throughout the session, with 10-year Treasury yields largely staying near 0.80%.
Looking ahead, it is a question of how Wall Street will react to all of this. The reception to the Fed wasn't too welcoming yesterday so we'll have to see if they will have a change of heart today, with the US stimulus bill also said to be near a bipartisan agreement.
But despite the dollar fading gains, don't rule out the king just yet. The near-term picture for dollar pairs are only starting to shift but they are not suggestive of a turnaround in sentiment just yet - for now at least.
As for stocks, the sharpest of bounces tend to come in a bear market. However, it doesn't mean that we have hit the bottom just yet.
So, let's see how all of this goes as we continue to navigate through coronavirus headlines with the US weekly initial jobless claims report still to come on Thursday as well.