America’s Roundup: U.S. dollar falls as Fed rate cut expectations rise,Wall Street deepens losses, Gold retreats, Oil slips as virus fears outweigh supply cuts-February 26th,2020

Market Roundup

• Canada Corporate Profits (QoQ) 3.6%,0.4% previous

• US Redbook (MoM) -0.2%,-0.2% previous  
• US Redbook (YoY)  5.4%,5.7% previous

• US Dec S&P/CS HPI Composite – 20 s.a. (MoM)  0.4%, 0.5% forecast, 0.5% previous    

• US Dec S&P/CS HPI Composite – 20 n.s.a. (YoY)  2.9%,2.8%

• US Feb CB Consumer Confidence  130.7, 132.0    forecast, 130.4  previous

• US Feb Dallas Fed Services Revenues  14.0, 18.8 previous

Looking Ahead – Economic events and other releases (GMT)

•00:30 Australia  Construction Work Done (QoQ) (Q4) -1.0% forecast, -0.4% previous 
•00:30 Japan BoJ Core CPI (YoY) 0.3% previous

Currency Summaries

EUR/USD: The euro declined against dollar on Tuesday, as dollar dipped on expectations that the Federal Reserve would cut interest rates this year to relieve pressure on the economy caused by China’s coronavirus outbreak. The dollar rose last week to its highest level in years as the virus spread further around the world, with investors regarding all U.S. assets as safe havens. But money managers now think the Fed may be more inclined to cut rates, since it has the most room to do so . The euro was last trading up 0.30% at $1.0885. Immediate resistance can be seen at 1.0892 (Daily high), an upside break can trigger rise towards 1.0915  (21 DMA).On the downside, immediate support is seen at 1.0824 (9 DMA), a break below could take the pair towards 1.0759 (Lower BB).

GBP/USD: Sterling rebounded against greenback on Tuesday as markets worrying about the spread of coronavirus found some stability, encouraging investors to pare back their rush into dollars that had sent the British currency lower. The pound has been supported this month thanks to signs of a rebound in the UK economy and on expectations a new finance minister will raise public spending at next month’s budget. By 1241 GMT on Tuesday, the pound had rallied back towards $1.30, and was last up 0.4% at $1.2953. Immediate resistance can be seen at 1.3001 (30 DMA), an upside break can trigger rise towards 1.3040 (50 DMA).On the downside, immediate support is seen at 1.2968 (9 DMA), a break below could take the pair towards 1.2900 (Psychological level).

USD/CAD: The Canadian dollar rose against the greenback on Tuesday, after a speech by a Bank of Canada official which gave clues on the bank's thinking about the economic impact of the coronavirus outbreak. The Bank of Canada said on Tuesday it has no plans to issue a central bank digital currency at this time, but preparations are underway to create capacity to do so should Canada's payment ecosystem change. In a speech to a business audience in Montreal, Bank of Canada Deputy Governor Tim Lane made no mention of future rate moves. He said the bank had concluded there was “not a compelling case” for the issuance of a central bank digital currency (CBDC) at this time and outlined two primary scenarios that could warrant the consideration of such a policy move. Immediate resistance can be seen at 1.3319 (Higher BB), an upside break can trigger rise towards 1.3400 (Psychological level).On the downside, immediate support is seen at 1.3255 (9DMA), a break below could take the pair towards 1.3206 (30 DMA).

USD/JPY: The dollar dipped against the Japanese yen on Tuesday, as lingering concerns about the economic hit of the spread of the novel coronavirus increased demand for yen. The yen strengthened against the dollar end euro in a sign traders were in search of relatively safer assets.Countries around the world are stepping up efforts to prevent a pandemic of the flu-like virus that has now infected more than 80,000 people, 10 times more cases than the SARS coronavirus. Strong resistance can be seen at 110.56 (9DMA), an upside break can trigger rise towards 111.79 (Higher BB ).On the downside, immediate support is seen at 109.60(50 DMA), a break below could take the pair towards 109.00  (Psychological level). 

Equities Recap

European shares ended at their lowest in nearly two months on Tuesday as concerns over coronavirus pandemic roiled markets which had already marked enormous losses in the prior session.  
UK's benchmark FTSE 100 closed down by 1.94 percent , Germany's Dax ended down by 1.88 percent, France’s CAC finished the day up by 1.94 percent.

Wall Street added to losses on Tuesday with its three major stock indexes falling 1%, after officials said the coronavirus was “a rapidly escalating epidemic,” a day after virus worries sent the S&P 500 and the Dow Industrials to their biggest daily declines in two years.

Dow Jones closed down by 1.94 percent, S&P 500 ended down by 0.38 percent, Nasdaq finished the down up by 0.67 percent.

Treasuries Recap

The 10-year U.S. Treasury note hit a record low yield on Tuesday as traders kept up the flight to safety on concerns the coronavirus epidemic would have a significant impact on global growth, coupled with soft U.S. economic data.    

The benchmark 10-year yield was down 6.5 basis points in afternoon trading at 1.3121%, continuing declines from Monday and reaching as low as 1.3072% a little after 2 p.m. That was below its previous all-time low of 1.321% reached on July 6, 2016.    
Commodities Recap

Oil fell below $56 a barrel on Tuesday, dropping for a third day, as concerns about the spread of the coronavirus and its impact on oil demand outweighed OPEC output cuts and Libyan supply losses.
Brent crude fell 83 cents to $55.47 a barrel by 12:33 p.m. EST (1733 GMT). U.S. West Texas Intermediate crude slipped 91 cents to $50.52.    

Gold fell on Tuesday as the metal’s rally to 7-year highs in the last session prompted profit-taking, but worries about the coronavirus kept bullion above $1,650 an ounce.

Spot gold slipped 0.3% to $1,655.86 per ounce by 11:08 a.m. EST (1608 GMT), paring earlier losses. The metal shed 1.7% at one point in the day.U.S. gold futures fell 1.1% to $1,657.80.                        

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