Forex news from the European morning session - 16 March 2020
Headlines:
- EU said to have agreed to enact measures on external borders in the coming hours
- Boris Johnson is meeting with BOE governor and UK finance minister
- BOE's Bailey pledges further prompt action if and when needed
- Japan foreign ministry reportedly calls for halting travel to Europe
- German state of Bavaria declares state of emergency for 14 days
- SNB total sight deposits w.e. 13 March CHF 603.0 bn vs CHF 598.5 bn prior
- Bank of Korea cuts key interest rate by 50 bps to 0.75%
- Philippines president Duterte announces that Luzon to go into lockdown
- BOJ's Kuroda: Today's decision is part of cooperation with other nations
- BOJ: May increase or cut ETF goal depending on situation
- BOJ maintains policy rate, increases pace of ETF purchases
Markets:
- JPY leads, CAD lags on the day
- European equities down 8-9%; E-minis limit down
- US 10-year yields down 21 bps to 0.74%
- Gold down 4.5% to $1,460
- WTI down 8.0% to $29.18
- Bitcoin down 16% to $4,580
'Sell everything' are the two words you need to know to start the new week as the market is in liquidation mode as we see equities drown, commodities tumble and even precious metals suffer a meltdown despite a host of central bank action today.
The BOJ disappointed the market as all they really did is expand ETF purchases following action by the Fed and RBNZ earlier in the day. USD/JPY rose to 106.90 initially before gradually fell back towards 105.80 as the central bank did little to quell yen strength.
The equities selloff continued in stunning fashion as Friday's rebound proved no more than a dead cat bounce, with European indices seeing 8-9% losses so far. Meanwhile, US futures hit limit down very early on though S&P 500 ETFs are down by ~10%.
The franc pushed gains amid the equities selloff with USD/CHF falling from 0.9470-80 to 0.9392 before recovering some ground. The SNB may be slowing down the franc's gains, as evident by sight deposits data today - crossing CHF 600 billion for the first time.
The dollar is trading lower, falling against the likes of the euro, yen, pound and franc but keeping gains against the risk/commodities bloc.
Meanwhile, the selloff extended across other asset classes with gold down by over 4% and silver even falling by a whopping 17% alongside platinum and palladium, down by 18% and 12% respectively.
Oil was also sold heavily as it fell back under $30 in a 8% drop today.
As the virus continues to become more widespread across the globe, the economic fallout continues to deepen as we see more and more countries isolate one another and go into lockdown. Strap in, folks. This is going to be another crazy week.
For now though, cash is king.
