global equities

Global Stocks Rebound After Fed’s Emergency Rate Cut

Emergency Rate Cut
Emergency Rate Cut

Asian indices finished mixed as the emergency rate cut from the Fed yesterday failed to ease investors’ fears about the impact of the coronavirus outbreak. Global confirmed cases had surpassed today 93,000 and many companies around the globe are banning traveling while they offer the employees the choice to work from home.

The Federal Reserve proceeded with a 50 basis point rate cut yesterday in an effort to offset the coronavirus outbreak impact. The Hong Kong Monetary Authority followed suit and the South Korean government unveiled a $9.8 billion fiscal stimulus to help businesses. Wall Street indices ended in negative territory despite the aggressive interest rate cut by the Fed. Yesterday, the RBA also cut the interest rates by 25 basis points. 

Nikkei 225 finished 0.08% higher at 21,100. The Shanghai Composite index closed 0.43% higher at 3005. The Singapore FTSE Straits Times closed up 0.18% at 3024. Hang Seng in Hong Kong ended 0.15% lower at 26243. The ASX 200 slumped 1.7%  at 6325, despite the RBA interest rate cut

European stocks started higher for the second consecutive day. The German DAX is 1.03% higher at 12,109. CAC40 index is 1.27% higher at 5,462, while the FTSE MIB in Milan is 0.97% higher at 21,958. In London, the FTSE 100 is 1.35% higher at 6,809.  

In the commodities markets, the WTI crude oil is 1.12% higher at $47.72 while the Brent oil is 1.10% higher at $52.40 per barrel. The gold price is trading slightly lower, giving up 0.21% at 1637. The gold price is bullish, and the first resistance will be met at $1,689 the recent high, while the support stands at $1,584 the recent low. Silver price is 0.10% lower at $17.19.    

Cryptocurrencies traded mostly mixed during the Asian trading session. Bitcoin (BTCUSD) is 0.47% lower at $8,802 hitting the daily low at $8,693 and the daily high at $8,839. Bitcoin’s technical outlook is neutral now as the cryptocurrency is trapped between the 50 and 100-day moving average. First support for BTCUSD stands now at $8,400 the low from Friday’s trading session. On the upside, the first resistance stands at 8893 the daily high and then at 10,495 the yearly top.

Ethereum (ETHUSD) trades 1.13% higher at 225.09 with capitalization at 24.85 billion. The initial resistance for ETHUSD stands at $274.18, the February top while the first support stands at $213.47 the February low. Ripple is 1.08 higher at 0.2364. Litecoin is 0.21% lower at 60.88. The crypto market capitalization stands now at $252.70 billion.

In the Lookout: China Caixin Services PMI below forecasts (52.6) in February: Actual (26.5).

Australia Gross Domestic Product came in at 0.5%, above expectations of 0.3% in the fourth quarter. 

The New Zealand ANZ Commodity Price came in at -2.1%, below the forecasts of -0.8% in February. 

The People’s Bank of China has set the Yuan (USDCNY) reference rate at 6.9514 versus yesterday’s fix at 6.9516. 

Trading Perspective: In the foreign exchange markets, the Aussie dollar is 0.43% higher at 0.6611 against the USD. The US dollar index is 0.12% higher at 97.25. NZDUSD trades 0.24% higher at 0.6289.

USDCHF At 17-Month Lows After Fed Emergency Rate Cut

USDCHF is under selling pressure for the fifth consecutive day after the Fed yesterday in a surprising move cut the interest rates by 50 basis points to 1%-1.25%. US Dollar got a hit on Monday after the weaker ISM manufacturing PMI. U.S. ISM Manufacturing PMI registered in at 50.1 below the market expectations of 50.5 in February. The ISM Manufacturing Prices Paid registered in at 45.9, also below the expectations of 51.

Traders today await the release of the ADP report on private-sector employment and the ISM Non-Manufacturing PMI, which affect the USDCHF price dynamics and produce some short-term trading opportunities.  

USDCHF technical outlook is bearish as the pair makes consecutively lower lows and lower highs and also trades below all major daily moving averages.  

The first support for the stands at 0.9540 the daily low. The next support level will be met at 0.9526 the low from April 10th, 2018. 

On the other hand, initial resistance will be met at 0.9596 the daily high. The next hurdle stands at 0.9654 the high from March 2, while Friday’s high at 0.9695 is the next supply zone. 

NZDUSD Rebound From Multi Years Low on Weak USD

NZDUSD trades higher for the third consecutive day amid USD weakness across the board after the Federal Reserve cut the interest rates by 50 basis points. On the other hand, the New Zealand ANZ Commodity Price came in at -2.1%, below the forecasts of -0.8% in February eliminates the pair’s upside.   

NZDUSD is under selling pressure after December 2019 as investors increased bets of an interest rate cut by the Central Bank in the first quarter of 2020. 

On the technical side, the pair today is 0.22% higher at 0.6289. Despite the rebound the last three trading sessions the technical outlook is still bearish for NZDUSD, and lower levels can’t be ruled out. 

The first resistance for the NZDUSD pair stands at 0.6297 the daily top. In case the buyers break above, the next target would be at 0.6324 the high from yesterday’s trading session. The next supply zone is at 0.6360 the high from February 25th.   

On the other side, initial support will be met at 0.6264 the daily low. A break below might test 0.6246 the low from yesterday’s trading session. More bids might emerge at 0.6198 the low from March 2.