Another day of heavy risk aversion ahead of European trading
- WHO's Tedros finally calls it: The coronavirus can be characterized as a pandemic
- US President Trump: US banning all travel from Europe for next 30 days
The Dow fell by nearly 6% in overnight trading, entering a technical bear market after the WHO officially labeled the coronavirus as a pandemic.
Stocks bounced back a little to start Asia Pacific trading but were hammered lower after Trump called for a travel ban on Europe for the next 30 days - with his initial message having a bit of a mix up on trade as well. But that was clarified soon enough here.
As US futures see a 4% drop on the day, the yen is leading gains in the currencies space as Treasury yields are also easing lower after holding up decently yesterday.
European equities look set for a real beating later today and that is also helping to underpin the franc on the day. Meanwhile, the dollar remains mixed as investors are trying to sort out the latest developments across the globe and with Treasury yields.
It is a bit of a tricky one for the dollar right now - more so against the commodity currencies I would argue - as the market is figuring out if we have found a bottom in yields.
10-year Treasury yields are down by 13 bps today to 0.73% but they are well off record lows of 0.31% posted on Monday. How does all of this play into the risk mood and the dollar?
With the market volatile as ever, it is really tough to say but for now, the likes of the yen and franc look odds on to end the week firmer with the weekend fast approaching too.
