Forex Today: Yen slumps as risk rebounds on coronavirus relief package, UK/German data eyed
Following the massive Wall Street slump overnight, the risk sentiment rebound sharply in a calmer Tuesday’s Asian trading, as investors cheered the global coordinated policy action adopted by the governments and central banks to fight the coronavirus-led economic shock.
New Zealand announced NZD $12.1 bln economic package in response to COVID-19 while the Bank of Japan (BOJ) pumped in more liquidity into the financial system. Further, the UK is likely to unveil a significant stimulus measure.
Despite additional stimulus expectations, the Asian markets traded mixed, with the Japanese and Chinese stocks in the red, in sync with the US equities declines. Meanwhile, the US Treasury yields and equity futures bounced sharply, driving USD/JPY over 100-pips northwards to briefly regain the 107 handle. With the virus concerns still lurking, especially with lockdowns spread into many countries, the spot reversed a part of the rally to trade around 106.50 towards Asia close.
The Antipodeans also failed to sustain the early bounce, as AUD/USD fell back below 0.6100 while the Kiwi surrendered 0.6050 levels. USD/CAD dropped below 1.40 as oil prices rebounded over 4%. Gold prices also showed some signs of life and traded close to the 1500 mark.
Among the European currencies, EUR/USD consolidated in a tight range below 1.12 while the cable saw some fresh selling and headed back towards 1.2200 amid a surge in the number of the virus cases in the UK.
Main topics in Asia
US Treasury Sec. Mnuchin: We’re going to update Senate On Coronavirus Relief Bill
US President Trump: We will be stronger than ever before
UK to unveil significant financial package to help firms tomorrow
Death toll from coronavirus outbreak in China's Hubei at 3,111 as of end-March 16
Japan Econ Min: To refrain from commenting on financial markets and share prices
RBA Minutes: The Board was prepared to ease monetary policy further to support the Australian economy
Japan Finmin Aso: Will hold G7 finmin call likely Tuesday night, No comment on FX
Venezuela's Maduro says the value of a barrel of Venezuelan oil is today below the costs of production
New Zealand announces nz$12.1 bln economic package in response to COVID-19
BOJ buys JPY 100bn JGBs of 3-5 year and 5-10 year maturity
South Korea confirms 84 new coronavirus cases, 6 more deaths
Senior Japanese FinMin Official: To explain the policy steps put together so far on G7 call
Moody’s 2020 forecasts no growth in Japan and Singapore, slower growth in China
China’s NDRC: Economy will return to normal in Q2
BOJ offers $30.272 bln USD liquidity via its 84-day operation, largest amount since Dec 2008
Japan FinMin agreed with China and S. Korea to cooperate on tackling coronavirus
Key focus ahead
Traders continue to take cues from the risk trends, driven by the coronavirus-related developments and incoming global coordinated stimulus measures to stabilize the markets hit by the virus outbreak.
On the data front, Tuesday’s macro calendar remains eventful, with the UK labor market report of note, due at 0930 GMT, followed by the German ZEW Survey at 1000 GMT, which could have a significant impact on the shared currency.
Next of relevance remains the US Retail Sales and Canadian Manufacturing Sales data, both lined up for release at 1230 GMT. Later in the NA session at 1315 GMT. The US Industrial Production and Capacity Utilization data will also grab some attention ahead of the JOLTS Job Openings, New Zealand’s GDT Price Index and API Weekly Crude Oil Stock data. The API data, due at 2030 GMT, will be closely eyed for fresh oil-price direction.
EUR/USD snaps four-day losing run, awaits convincing break above 1.12
EUR/USD ended a four-day losing run on Monday and traded just below 1.12 during the Asian trading hours. Fed's easing likely drew bids for EUR/USD on Monday. Talks of aggressive fiscal stimulus may bode well for equities and draw offers for the single currency.
GBP/USD under pressure below 1.2300, eyes on UK jobs, coronavirus stimulus
GBP/USD bears catch a breath near the lowest levels since October 2019. BCC anticipates the slowest UK GDP growth since GFC. Focus on UK jobs data ahead of PM Johnson’s "significant coronavirus economic package".
UK jobs preview: Jobless claims may provide signs of the coronavirus impact, shape pound-positioning
The UK's unemployment rate and wage figures for January are now stale in fast-moving markets. Claimant Count Change numbers for February are already more up-to-date statistics that may move the pound.
German ZEW Preview: Three reasons why low expectations are too optimistic, lose-lose for EUR/USD
The German ZEW Economic Sentiment for March is projected to tumble down due to tot he coronavirus crisis. The rapid developments mean that expectations may already be too high. EUR/USD is set in a lose-lose situation with the data.