Forex news from the European morning session - 13 March 2020
Headlines:
- S&P 500 futures hit limit up band of 2,582 for the day
- ECB's Visco: There will be more action if needed
- Trump: Changes have been made, testing will soon happen on a very large scale basis
- BOJ reportedly may top up purchases of commercial paper, corporate bonds at meeting next week
- PBOC announces RRR cut for some banks
- BOJ purchased another ¥101.4 billion ETFs today, sixth time this month
- ECB's Lane: ECB retains the option of future rate cuts if needed
- South Korea says to ban stock short-selling for 6 months
- BOJ says that bond buying operation today was due to fall in market liquidity
- BOJ reportedly said to be hesitant to cut rates next week
- BOJ offers to buy ¥200 billion of 5 to 10-year bonds in unscheduled operation
Markets:
- AUD leads, JPY lags on the day
- European equities up over 5%; E-minis up 5%
- US 10-year yields up 8 bps to 0.88%
- Gold up 0.7% to $1,587
- WTI up 5.2% to $33.15
- Bitcoin down 4.6% to $5,462
It is all about the risk turnaround today but will it prove to be nothing more than a dead cat bounce when this is all said and done? Only time will tell.
For now, the market is piling back into risk after a historic selloff over the last two days.
The tail end of Asia Pacific trading was still looking bleak but things quickly turned as US futures saw a bid which took it from 3% losses to 1% gains. That helped Asian stocks recover from the lows with Australia's ASX 200 posting an impressive 10% gain in 90 minutes.
Central bank action to ensure liquidity and market calm certainly didn't do no harm as we saw the BOJ step in with bond/ETF purchases, Norges Bank cutting rates, Riksbank providing funding measures and the PBOC also cutting RRR rates.
USD/JPY moved higher from 105.00 to 105.50 before rising further to a fresh-one week high of 106.50 as we see S&P 500 futures hit limit up on the day.
As risk was performing better in Europe as well, the aussie and kiwi are keeping firmer with AUD/USD climbing back towards 0.6300 levels while NZD/USD moved up from 0.6120 to 0.6150 levels during the session.
The dollar was more choppy and is traded gains and losses against the likes of the euro and pound before settling a little higher currently.
Looking ahead, the market has a lot of tinkering to do ahead of the weekend. But regardless of the bounce today, it will end up being a brutal week for stocks. And this may ultimately prove to be nothing more than a dead cat bounce in the end.
Again, the sharpest of bounces tend to come in bear markets. But that doesn't necessarily mean that we have found a bottom just yet.
