Europe Roundup: Euro declines as virus fears outweigh stimulus hopes

Europe Roundup: Euro declines as virus fears outweigh stimulus hopes,Gold falls 1%,U.S. crude prices fall to 17-year low as coronavirus spreads-March 18th,2020

18 March 2020, 15:15

Market Roundup

• Italian Jan Industrial New Orders (YoY) -1.8%, 0.7% forecast, 5.7% previous    

• Italian Jan Industrial New Orders (MoM) 1.2% , -0.2% forecast, 1.3% previous
    
• Italian Jan Industrial Sales (YoY) 3.80%,-0.90%    forecast, -1.50% previous  
 
• Italian Jan Trade Balance 0.542B, 2.813B forecast, 5.007B previous

• Italian Jan Trade Balance EU 0.83B, -0.75B previous

• EU Feb Core CPI (MoM) 0.4%,0.4% forecast,0.4% previous

• EU Feb Core CPI (YoY) 1.2%,1.2% forecast, 1.2% previous

• EU Feb CPI (YoY) 1.2%,1.2% forecast, 1.2% previous

• EU Feb CPI (MoM) 0.2%,0.2%    forecast, -1.0% previous

• EU Jan Trade Balance 1.3B, 23.1B previous  
 
Looking Ahead - Economic Data (GMT)    

•14:30 US Crude Oil Inventories 3.256M forecast, 7.664M previous

•14:30 US Cushing Crude Oil Inventories     0.704M previous

•14:30 US Gasoline Inventories    -2.890M, -5.048M previous 
   
• 17:30 Brazil CAGED Net Payroll Jobs 70.00K forecast, -307.31K previous

Looking Ahead - Events, Other Releases (GMT)    

• No significant events    

Fx Beat              
 
EUR/USD: The euro declined against dollar on Wednesday, as worries that the coronavirus epidemic would erode global growth weighed on single currency. Markets around the world have been crimped by the spread of the coronavirus, has already claimed more than 7,900 lives around the world. The world’s richest nations prepared more costly measures on Tuesday to combat the global fallout of the virus, which has triggered social restrictions unseen since World War Two and sent economies spinning toward recession. The euro was last trading down 0.42% at $1.0953. Immediate resistance can be seen at 1.1082 (5 DMA), an upside break can trigger rise towards 1.1187 (9 DMA).On the downside, immediate support is seen at 1.0943 (9 DMA), a break below could take the pair towards 1.0900 (Psychological level).

GBP/USD:  Sterling declined against dollar on Wednesday, as investors focused on the economic impact of the coronavirus. News that Britain would launch a 330 billion-pound ($399 billion) lifeline of loan guarantees and provide a further 20 billion pounds in tax cuts, grants and other help for businesses facing the risk of collapse was shrugged aside by traders. The British currency fell 0.4% against dollar to $1.1977, its lowest since September 2019 while against the euro, the pound weakened 0.4% to 91.70 pence. Immediate resistance can be seen at 1.2100 (Psychological level), an upside break can trigger rise towards 1.2207 (5 DMA).On the downside, immediate support is seen at 1.1821 (Daily low), a break below could take the pair towards 1.1800 (Psychological level).

USD/CHF: The dollar strengthened against the Swiss franc on Wednesday, after the Federal Reserve said it would buy short-term corporate debt directly from companies to help relieve credit markets under strain from the economic impact of coronavirus epidemic. The move to add liquidity to credit markets came as major central banks and commercial counterparts joined forces to alleviate broad shortages of dollar financing in global markets. At (GMT 12:53), Greenback gained 0.36% versus the Swiss franc to 0.9643. Immediate resistance can be seen at 0.9851 (Higher BB), an upside break can trigger rise towards 0.9863 (200 DMA).On the downside, immediate support is seen at 0.9528 (5 DMA), a break below could take the pair towards 0.9453 (9DMA).

USD/JPY: The dollar rose against the Japanese yen on Wednesday as fears over the coronavirus pandemic kept markets frazzled despite massive injections of liquidity by central banks. Markets have crumbled this month as investors liquidated nearly everything for cash - driving up the dollar’s value and the cost of borrowing the greenback abroad. The world is adopting a war footing as the pandemic spreads and country after country announces draconian lockdowns. The virus has killed over 8,000 people globally, while the total number of cases is approaching 200,000. Strong resistance can be seen at 107.89 (21DMA), an upside break can trigger rise towards 108.80 (50 DMA ).On the downside, immediate support is seen at 106.77 (5 DMA), a break below could take the pair towards 105.74 (9 DMA). 

Equities Recap

European shares rose on Wednesday, supported by a weaker euro, while a decline in the number of new coronavirus cases raised hopes that the impact of the epidemic on the global supply chain would be short-lived.

At (GMT 13:07),UKs benchmark FTSE 100 was last trading downat 4.62 percent, Germanys Dax was up by 5.24 percent, France’s CAC was last down by 5.74 percent.
Commodities Recap

Gold erased early gains to fall more than 1% on Wednesday as mounting fears over the economic hit from the coronavirus overshadowed additional stimulus measures by the United States and prompted investors to sell precious metals to hoard cash.

Spot gold fell 1.1% to $1,511.72 per ounce by 0701 GMT. U.S. gold futures were down 0.9% to $1,512.10 an ounce.    

Treasury Recap

High-grade euro zone government bonds led by Germany saw yields rise on Wednesday morning as speculation grew around the issuance of joint euro zone bonds and governments around the world ramped up spending plans to combat the coronavirus fallout.

Germany’s 10-year government bond yields rose nine basis points to the highest level in over a month at -0.342% and other high-grade euro zone bond yields added between 8-12 basis points.,