Equities and indices face meltdown, US NFP in focus, COVID-19 outbreak woes keeps bears underpinned.
Summary: Global equities are on meltdown over escalating COVID-19 outbreak across major global economies. Headlines revealed escalation of total victim count from across globe moving past 100,000 victims which in-turn influenced a meltdown in major long term government bonds of all key economies. Aside from major government bonds, equities, and linked key indices also suffered a meltdown across key Asian markets.
Following dovish cues from Asian markets, European markets also opened on a soft note. The loss of key equities and indices accelerated late in the European session as Airbus revealed that it had no new orders owing to the coronavirus outbreak while travel-related stocks also faced a cave-in. The only winners of the day were top safe-haven assets such as rare metals and safe-haven currencies.
Precious Metals: Both gold and silver are trading positive on renewed fervor surrounding safe-haven assets. Price of gold scaled to fresh yearly highs near $1700 handle but the end of week profit booking activity from scalpers trimmed at gains capping further upside move.
Crude Oil: Crude oil price tanked in the global market with futures of both major benchmarks Brent and WTI declining more than 4% each in an intra-day activity. The decline was influenced by Russia’s refusal to comply with OPEC’s recommended supply cut measures which pointed to the possibility of a clear glut scenario.
AUD/USD: The pair is trading positive in the global market today with price scaling as high as 0.6657 in an intra-day activity. But the pair has since declined from highs and is currently trading around the 0.663 handle as focus shifts to US NFP release. Broad-based USD weakness keeps AUD bulls supported.
On The Lookout: Focus continues to remain on headlines surrounding COVID-19 outbreak and global countermeasures and preventive measures as victim count escalates past 100,000 people according to the latest headlines. Following the latest victim count for COVID-19, major long term government bond yields from across the globe slid down sharply. As Russia failed to comply with OPEC recommendation of an additional output cut by 1.5 Million barrels, OPEC’s decision for further supply cut for Q2 2020 hasn’t come into effect creating a glut scenario.
As both bonds and equities faced a meltdown at the same time, demand for gold and other major precious metals spiked sharply helping gold see its best weekly performance in nearly 11 years. On the release front, the US calendar sees the release of Average Hourly Earnings for Feb, Non-Farm Payrolls, Trade balance and Unemployment Rate for Feb while Canadian calendar sees the release of IVEY PMI, trade balance and the unemployment rate for February.
Trading Perspective: Major global currencies are likely to trade positive within the weekly price range as declining US T.Yields weighed down USD in the global market. News of another rate cut by US Fed in March 2020 and new COVID-19 victim count, travel stock woes caused US futures trading in the international market to see sharp decline which suggests Wall Street indices and equities are likely to see dovish price activity today.
EUR/USD: The pair is trading positive in the global market as EURO rides the momentum in full force taking advantage of USD’s weakness over the decline in US T.Yields and news of COVID-19 outbreak in NYC. The price has moved past mid-1.12 handle and is testing 1.13 handle while traders await US data for short term profit opportunities.
GBP/USD: The pair is trading with positive bias in the global market as USD’s weakness led by COVID-19 outbreak woes temporarily outshined the concerns stemming from uncertainties surrounding EU-UK talks. The pair tested 1.30 handle but trades mostly around the 1.2990 handle as traders await US data for short term profit opportunities.
USD/CAD: The pair is trading positive in the global market despite broad-based USD’s weakness as Loonie lost support over a 4% decline in crude oil price in the international market. USD’s weakness keeps the pair trapped below mid-1.34 handle while traders await the US and Canadian macro data for directional cues and short term profit opportunities.
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