Forex Today: Coronavirus pandemic fears intensify, US 10-year T-yields hit fresh record lows
With the coronavirus pandemic fears intensifying each passing day, especially after the World Health Organization (WHO) said that the virus is spreading faster outside China, the risk sentiment remained soured in Thursday’s Asian trading.
Markets shunned riskier assets, as S&P 500 futures dived over 1.50% while the US benchmark 10-year Treasury yields hit a new record low below 1.30%. The Asian equity markets ex-China traded with steep losses and oil prices hit fresh yearly lows amid increased global slowdown risks due to the virus impact. Gold prices, however, failed to benefit from risk-aversion and broad US dollar weakness, as the price slipped back towards 1650 levels.
The greenback remained on the offers across the board, as the virus hit the US shores. Most majors, therefore, traded on the front foot, with the safe-havens – the Swiss franc and yen, having gained the most. USD/JPY tested the 110 support area after several recovery attempts while the USD/CHF pair extended losses below 0.9750. The higher-yielding Antipodeans bounced-off fresh multi-month lows and stood resilient to downbeat local data. The Aussie regained the 0.6550 level while the Kiwi recovered to 0.6300. Meanwhile, USD/CAD tested the five-month high at 1.3348 on oil-price weakness.
Main Topics in Asia
Japan Ruling Parties Are Mull Extra Budget Over COVID-19 Virus – Nikkei
President Trump and members of the coronavirus Task Force hold a news conference
NZ finmin: government and RBNZ have scope to respond if needed due to virus
Bank of Korea defies expectations of 0.25% rate cut
Mainland China 433 new coronavirus cases and 29 new deaths
BoJ Kataoka: BoJ is ready to ease without hesitation if needed
South Korea confirms 334 new coronavirus cases, total count at 1595, risk-off persists
Canadian PM Trudeau: We are one step closer to ratifying the new NAFTA (USMCA)
BOK’s Lee: Growth outlook assumes coronavirus outbreak won't last too long
IMF, World Bank consider 'virtual' Spring Meetings as coronavirus spreads - Reuters
OPEC’s Barkindo: Monitoring suspected Vienna coronavirus case ahead of March 5-6 meeting
US coronavirus task force meeting due at 1930 GMT Thursday
S&P affirms New Zealand’s rating and positive outlook, Kiwi stays below 0.6300
Key Focus Ahead
Amid a lack of first-tier macro news on the EUR calendar today, the focus will remain on the risk trends amid incoming coronavirus headlines and UK’s post-Brexit negotiation objectives. However, the Eurozone consumer and industrial confidence data could offer some impetus to the EUR, GBP traders. The Bank of England (BOE) Deputy Governor Cunliffe’s speech, due at 1030 GMT will be also closely eyed.
On the contrary, the US docket remains quite eventful with the Durable Goods Orders, Jobless Claims and Q4 Preliminary US GDP will draw some attention at 1330 GMT. At the same time, the Canadian Current Account data will be reported. The US Pending Home Sales will drop in at 1500 GMT, followed by speeches from the Fed and ECB officials.
Next of relevance remains the Canadian Wholesale Sales data among a couple of regional economic news from the US. Markets will continue to watch out for any fresh updates on Brexit-related developments.
EUR/USD: Better bid around 1.09, Eurozone sentiment data eyed
EUR/USD is on the rise but struggling to take out Wednesday's high. The bulls need to invalidate Wednesday's doji candle to invite stronger buying pressure. The euro to take cues from Eurozone consumer and industrial confidence data.
GBP/USD consolidates losses ahead of UK’s list of post-Brexit negotiation goals
GBP/USD recovers from three-day low amid broad US dollar weakness. UK will release its mandate for the post-Brexit trade talk with the EU. BoE’s Cunliffe, US data and coronavirus updates will also keep traders busy.
US Durable Goods Orders January Preview: As China turns
Business investment projected to be positive after unexpected drop in December. US-China trade deal possibly trumped by virus. Economy may have accelerated in first quarter.
US Fourth Quarter GDP Preview: Old news
Annualized economic growth expected to be unchanged in the fourth quarter. Consumer sentiment was strong in the final three months. Downward revision to retail sales for November and December risk lower expansion.