Forex news from the European trading session - 15 April 2020
Headlines:
- Germany outlines proposal to ease restrictions - draft
- Saudi Aramco reportedly offers struggling refiners option to defer crude payments
- Fed's Daly: Recovery path out of the virus crisis is unlikely to be a swift one
- Spain daily coronavirus case count rises to six-day high
- WTI crude briefly falls to lowest level since 2002
- IEA says there is no feasible agreement that could cut oil supply by enough to offset demand losses
- German government reportedly plans to extend lockdown measures until 3 May
- A study shows that US may need to maintain social distancing until 2022
- French retail sales sank 24% in March from February amid lockdown, virus impact
- Germany sees slight rise in daily coronavirus case count
Markets:
- USD leads, AUD lags on the day
- European equities lower; E-minis down 1.5%
- US 10-year yields down 7 bps to 0.682%
- Gold down 0.3% to $1,721.60
- WTI down 2.3% to $19.65
- Bitcoin down 1.1% to $6,797
It is all about the dollar in the currencies space but this time around the greenback is roaring amid risk aversion and slumping oil prices.
After a solid day of trading yesterday, US futures abandoned the good mood in a continued fall to nearly 2% on the session as WTI crude briefly fell to its lowest level since 2002.
The slump in oil prices is a bit self-reinforcing as softer risk mood weighed on prices to start the session but the drop below $20 sees oil set off another wave of risk aversion.
As stocks slumped, bonds kept firmer with 10-year Treasury yields gradually making its way from 0.72% to 0.68% during the session.
In turn, that is keeping the yen underpinned but the dollar remains the lead gainer in the major currencies space as USD/JPY moved higher from 107.00 to 107.30-50 levels.
It is pretty much a slump across the board for other currencies against the greenback as EUR/USD eased from 1.0980 to 1.0910. Meanwhile, cable broke below 1.2600 in a fall to just under 1.2500 before settling the near figure level now.
Commodity currencies are the hardest hit with AUD/USD slumping from 0.6420 to 0.6310 while NZD/USD fell from 0.6080 to 0.6000. USD/CAD also raced higher amid the softer risk mood and weaker oil prices, breaking above 1.4000 to 1.4040-60 levels.
The market is starting to regain a bit of fear amid economic worries and corporate earnings warnings, with the dollar starting to regain its footing as well. Let's see how Wall Street will take all of this in and this should set the tone for the rest of the week.
