Forex news for NY trading on March 16, 2020
Intro Paragraph Text Here.
- Another bloodbath as Fed cuts flop and market sinks most since 1987
- Trump: US has not decided to close borders
- Amazon is hiring
- White House recommends avoiding gatherings of more than 10 people
- US CDC reports count of virus cases at 3536 vs prior 1678
- Canada coronavirus cases rise to 407 from 324 earlier today
- Macron orders citizens to stay at home due to coronavirus, movements will be severely limited
- Senate Democrats to offer a $750B stimulus package
- WTI crude oil futures settle at $28.70 per barrel
- US 10 year yield declines to US session low
- New Jersey announces that all schools will be closed starting March 18
- Germany coronavirus cases jumps to 6012. That's a gain of more than 1100 on the day
- Canada PM Trudeau says borders to be closed
- Exxon Mobile cut to AA from AA+ from S&P, outlook negative
- Italy coronavirus cases rise to 27,980 from 24,747
- UK asks public to stop all non-essential contact and travel
- Goldman Sachs says US GDP could fall 5% in Q2
- European major indices closed down but recover well off the lows
- Ray Dalio: Printing of money and buying of debt assets 'almost certainly won’t work much'
- German government closes bars, theaters and museums
- Europe looking to suspend incoming travel from foreign nations - report
- Philippines to suspend stock market trading from March 17
- UK coronavirus cases rise to 1543 from 1372 a day ago
- The S&P 500 is now just 3% from the December 2018 low
- Finra halts OTC stock trading in the US (now resumed)
- Saudi Arabia will produce oil at maximum capacity, Aramco CEO says
- March US Empire Fed -21.5 vs +4.9 expected
- The JPY is the strongest and the CAD is the weakest as North American traders enter for the day
What an active day:
- The Fed cut rates 1% in the Asian session, surprising the market.
- The Fed announced quantitative easing to the tune of 500bn Treasuries & 200bn MBS
- The Fed announced that banks can borrow from the Discount window for up to 90 days
- They added liquiidity via daily repo action. The Fed basically said, whatever you need, we will provide
- Later in the day, the Senate Democrats offered a $750B stimulus package (TBD how it progresses).
So what happened in the markets?
Stocks plummeted
- The Nasdaq had its worst day ever.
- The Dow and the S&P % decline was the worst since 1987
- The Dow's point drop was the worst point loss ever
Many superlatives, but unfortunately they are all negative.
The numbers at the close are showing:
- Dow industrial average fell 2997.10 points or -12.93% to 20188.52.
- S&P index fell -324.89 points or -11.98% to 238-6413
- Nasdaq index fell -970.28 points or -12.32% at 6904.59
In the US debt market, not only did yields tumble with the 10 year leading the way at -23.4 basis points....
...but the spreads between European and US started to converge. European 10 year yields were mostly higher with Germany up 8.3 basis points and France up 14.8 basis points. The combination has pushed those levels closer and closer.
In the gold and precious metals market, prices fell.
- Spot gold had a volatile day and is closing down $-18.46 or -1.21% at $1511.37. The high for the day was up at $1575.47 while the low extended all the way down to $1451.55
- Spot silver also traded violently. It is closing at $12.90, down $-1.81 or -12.35% It traded in a $3.30 trading range. The high reached $15.15, while the low extended to $11.80. Crazy volatility
The oil markets were also volatile and moved lower as Saudi Arabia said they were not backing down from increasing production. The final numbers are showing:
- WTI crude oil futures $28.70. $-3.03 or -9.55%. The high price reached $33.75. The low price extended to $28.10.
- Brent crude oil is trading at $29.52, or $-4.33 or -12.79% on the day. It's high price extended to $35.84 while the low fell to $29.50.
Finally in the forex market, the flows so the JPY and the EUR benefit the most. They were the strongest of the major currencies. The JPY benefited from the Pavlovian flight into the "safety of the JPY". The EUR is a bit of a head scratcher as it is the current epicenter of the coronavirus.
On the weak side, the AUD and the CAD are the weakest. The loonie had the added push from the sharp lower oil prices.
How did the USD do today?
The greenback salt gains versus the CAD and AUD and to a lesser extent, the NZD and GBP, but saw declines versus the JPY, EU and CHF.
