Forex news from the European session - 31 March 2020
Headlines:
- China says that will make further targeted RRR cuts to medium and small banks
- Ford postpones North American production restart
- Spain reports 849 new coronavirus deaths in deadliest day of outbreak
- China reports 1,541 asymptomatic coronavirus cases as of 30 March
- Eurozone March preliminary CPI +0.7% vs +0.8% y/y expected
- China NHC says to start reporting number of asymptomatic virus cases from 1 April
- RKI chief says that optimistic about flattening the virus curve in Germany
- Tokyo said to report 78 new coronavirus cases today
- Italian economic development minister says need to prepare for end of lockdown
- French finance minister says that 21,000 firms have requested loan guarantees
Markets:
- USD leads, AUD lags on the day
- European equities mixed; E-minis down 0.3%
- US 10-year yields down 4 bps to 0.69%
- Gold down 1.4% to $1,600
- WTI up 7.8% to $21.66
- Bitcoin down 1.3% to $6,392
The march higher in the dollar is the main story in European trading so far, as the greenback further recoups losses from last week with a couple of key technical levels starting to come into play during the session.
EUR/USD firmly broke below its key daily moving averages and the 1.1000 handle as price also broke below its 100-hour moving average on the way down to 1.0930-40.
USD/JPY also crept higher from 108.30 to 108.70 as the dollar kept firm, seeing price action test waters just above its 200-day moving average currently.
Meanwhile, risk currencies were pressured as equities traded in a mixed and tepid mood during the session - giving up earlier gains at the start of the cash market open.
AUD/USD eased from 0.6200 to just under 0.6100 currently while USD/CAD is pushing gains at around 1.4250-60 despite oil prices bouncing a little from $20 levels overnight.
In the equities space, it is all about month-end and quarter-end focus right now as investors are pretty much just dipping their toes in fear of re-balancing flows.
US futures remain more tepid, fluctuating between mild gains and mild losses as there is still uncertainty about whether said re-balancing flows have played out completely yet.
Tomorrow will present a new challenge and hopefully fresh direction on how the market is actually feeling amid virus concerns and ongoing lockdowns everywhere in the world.
The dollar will also be an interesting spot to watch as it starts to crack key technical levels; and the market has to figure out if Fed swap lines will be enough to keep funding pressures at bay or if the economic fallout is going to spur another rush to the dollar in due time.