Europe Roundup: Sterling falls to lowest since 1985, European shares edged down, Gold slips, Oil up after three-day plunge but coronavirus curbs gains-March 19th,2020

Market Roundup

• German March Ifo Business Climate Index  87.7, 95.3 forecast, 96.0 previous

• EU Jan Construction Output (MoM)  3.61%,-1.82% previous

• French 3-Year BTAN Auction -0.43%,-0.59% previous

• French 5-Year BTAN Auction -0.22%,-0.50% previous

Looking Ahead – Economic Data (GMT)
 •14:00 Feb  US Leading Index (MoM) 0.1% forecast, 0.8% previous

•14:00 Russia Central Bank Reserves (USD) 577.8B previous

• US Natural Gas Storage -6B forecast, -48B previous

Looking Ahead – Events, Other Releases (GMT)    

• No significant events  


EUR/USD: The euro declined against dollar on Thursday, as stimulus from the European Central Bank  failed to lift euro as world struggles to contain the coronavirus pandemic. The ECB will buy 750 billion euro ($820 billion) in bonds through 2020, with Greek debt and non-financial commercial paper eligible under the programme for the first time. The ECB's move follows emergency interest rate cuts around the globe, enormous fiscal support packages and six central banks promising discount dollars to banks to alleviate a squeeze in greenback funding. The euro was down 0.89 percent at $1.0812. Immediate resistance can be seen at 1.0788 (23.6% fib), an upside break can trigger rise towards 1.0820 (38.2% fib). On the downside, immediate support is seen at 1.0723 (Daily low), a break below could take the pair towards 1.9700 (Psychological level).

GBP/USD: The British pound lost further ground versus the U.S. dollar on Thursday, as the coronavirus pandemic sends the currency reeling to its lowest levels in more than three decades against the greenback. Sterling had edged to a low of $1.1450 in New York trading on Wednesday and has plummeted more than 12% against the strengthening dollar over eight brutal days of trading. It has not been this weak since 1985, when the Plaza Accord was signed by the world’s richest nations to weaken the dollar and drag the U.S. economy out of recession. Immediate resistance can be seen at 1.1661 (Daily high), an upside break can trigger rise towards 1.1697 (50 % fib).On the downside, immediate support is seen at 1.1471(23.6% fib), a break below could take the pair towards 1.1400 (Psychological level).

USD/CHF: The dollar strengthened against the Swiss franc on Thursday, as extraordinary steps by central banks across the world to stem a coronavirus-induced financial rout boosted dollar. Bond markets stabilized somewhat after the European Central Bank pledged late on Wednesday to buy 750 billion euros ($820 billion) in sovereign debt through 2020.That brought the ECB’s planned purchases for this year to 1.1 trillion euro, with the new purchases alone worth 6% of the euro zone’s GDP. Immediate resistance can be seen at 0.9812 (Daily high), an upside break can trigger rise towards 0.9850 (20 feb high).On the downside, immediate support is seen at 0.9748 (23.6% fib), a break below could take the pair towards 0.9689 (38.2% fib).

USD/JPY: The dollar gained against the Japanese yen on Thursday, as investors scrambled to stock up on dollars   in a bid to stay liquid in unstable market conditions. The rush for dollars, the most widely traded currency in global commerce, has led to a surge in the greenback's strength. The U.S. Federal Reserve on Tuesday said it would reinstate a funding facility used during the 2008 financial crisis to get credit directly to businesses and households on fears of a liquidity crunch due to the virus. Strong resistance can be seen at 110.06 (Daily high), an upside break can trigger rise towards 110.48 (27th Feb high).On the downside, immediate support is seen at 109.00(Psychological level ), a break below could take the pair towards 107.87 (5 DMA).
Equities Recap

European shares dipped on Wednesday as fears over the relentless global spread of the coronavirus increased worries over the impact on European economy.

At (GMT 13:03),UK's benchmark FTSE 100 was last trading down at 1.86 percent, Germany's Dax was down by 0.80 percent, France’s CAC finished was down by 0.04 percent.

Commodities Recap

Gold prices fell on Thursday, as investors continued to hunt for cash to guard themselves from the global economic fallout from the coronavirus, after support measures from central banks failed to reassure markets.

Spot gold was down 0.8% to $1,473.69 per ounce at 1203 GMT, having earlier risen 1%. U.S. gold futures shed 0.1% to $1,476.

Oil prices rose nearly 3% on Thursday after a three-day selloff sparked by the spread of the coronavirus and a market share battle between Saudi Arabia and Russia drove them to their lowest in almost two decades.

Brent crude was up 72 cents, or 3%, to $25.60 a barrel by 1225 GMT, after plunging to $24.52 on Wednesday, its lowest level since 2003.

West Texas Intermediate (WTI) crude gained $1.57, or 7.8%, to $21.94 after dropping nearly 25% in the previous session to an 18-year low.

Treasury Recap

Government bond yields across the euro area slid sharply on Thursday after the European Central Bank stepped in with emergency stimulus measures to calm panicked markets in the face of the coronavirus outbreak.

Spanish and Portuguese 10-year bond yields slid around 30 bps each while benchmark 10-year German Bund yields were down 12 bps at -0.35%.

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