Daily Market Comment – Stocks steadier after crashing again; dollar also firmer

  • Wall Street suffers biggest drop since 1987 crash as investors flee stocks
  • Growing virus response still not enough to quell market turmoil
  • Gold remains on a down path as panicky investors turn to cash
  • Pound underperforms along with commodity and EM currencies

Bloodbath on Wall Street

There was no escaping the market carnage on Monday as extraordinary moves by the Federal Reserve and other central banks to restore investor confidence failed spectacularly. Shares on Wall Street plunged by the most since the stock market crash of 1987, with the Dow Jones sinking by 12.9% and the S&P 500 by 12.0%.

Shares in Europe were also a sea of red as the Euro Stoxx 50 index plummeted to the lowest since 2012.

Increasingly coordinated action by policymakers in recent days has had little effect in easing the market pain as the intense uncertainty about how this virus outbreak will unfold over the coming months and its effect on every part of the economy and society has left investors running for cover.

The Fed’s emergency 1% rate cut and injection of liquidity by all major central banks has been unable to allay deep concerns about the future of hard-hit industries such as airlines, travel and leisure. But with more and more governments telling their citizens to stay at home, other sectors could soon be joining airlines in requesting state bailouts.

Can US fiscal stimulus save the day?

The French and New Zealand governments became the latest to announce fiscal measures to help their economies get through the crisis, while Australia and the UK signalled that more aid on top of already announced stimulus is on the way.

But what matters more for traders is whether the United States can deliver a sizeable fiscal stimulus that would ease fears of the American economy going into a steep recession. And the markets may have gotten the first hint of a bigger virus relief bill yesterday after Treasury Secretary Steven Mnuchin met with Senators to push for a broader package.

This may be helping sentiment today as shares in Asia pared losses, while European indices and US stock futures have turned positive. Although bargain hunting following the relentless selling is also likely contributing to the rebound.

Dollar on firmer footing, gold slips again

The US dollar regained some poise on Tuesday after coming under pressure yesterday from the Fed’s surprise rate cut. The dollar index was last up 0.4%, helped by a broadly weaker yen, but the greenback also advanced against the euro and the Swiss franc. The rebound could extend if US retail sales numbers due later today beat expectations.

The slight lessening in safe haven demand weighed on gold, though the precious metal has been on the slide since the stock market sell-off accelerated a week ago. Investors have been dumping gold alongside risk assets to cover margin calls and as many traders increase their diversification into cash.

Gold was last trading at $1,483 an ounce in the spot market, down more than 12% from its 7-year peak set on March 9.

Pound slumps, commodity and EM rout continues

A slight pullback in the safe-haven yen provided some breathing space for the battered pound and the commodity-linked currencies like the Australian dollar but all still struggled against their US counterpart. Cable slumped to a more-than 6-month low of $1.2189, behaving more like an emerging market (EM) currency at times of a crisis given the UK’s large current account deficit.

In the EM sphere, the Mexican peso has been one of the worst performers, hitting an all-time low of 23 per dollar yesterday. Aside from the virus turmoil, the collapse in oil prices has not done the peso any favours, nor for the Australian, Canadian and New Zealand dollars, all of which are heavily exposed to commodity prices.

The aussie is in danger of soon breaching the $0.60 mark amid increasing speculation the Reserve Bank of Australia is preparing to launch a quantitative easing program.

최신 뉴스

RBNZ to deliver another double hike, spotlight on OCR projections - Forex News Preview

Week Ahead – A plethora of data, an RBNZ meeting, but focus on Fed minutes

Is China headed for a Lehman-style crisis?

Technical Analysis – Natural gas futures tick higher as bullish forces linger

면책조항: XM Group 회사는 체결 전용 서비스와 온라인 거래 플랫폼에 대한 접근을 제공하여, 개인이 웹사이트에서 또는 웹사이트를 통해 이용 가능한 콘텐츠를 보거나 사용할 수 있도록 허용합니다. 이에 대해 변경하거나 확장할 의도는 없습니다. 이러한 접근 및 사용에는 다음 사항이 항상 적용됩니다: (i) 이용 약관, (ii) 위험 경고, (iii) 완전 면책조항. 따라서, 이러한 콘텐츠는 일반적인 정보에 불과합니다. 특히, 온라인 거래 플랫폼의 콘텐츠는 금융 시장에서의 거래에 대한 권유나 제안이 아닙니다. 금융 시장에서의 거래는 자본에 상당한 위험을 수반합니다.

온라인 거래 플랫폼에 공개된 모든 자료는 교육/정보 목적으로만 제공되며, 금융, 투자세 또는 거래 조언 및 권고, 거래 가격 기록, 금융 상품 또는 원치 않는 금융 프로모션의 거래 제안 또는 권유를 포함하지 않으며, 포함해서도 안됩니다.

이 웹사이트에 포함된 모든 의견, 뉴스, 리서치, 분석, 가격, 기타 정보 또는 제3자 사이트에 대한 링크와 같이 XM이 준비하는 콘텐츠 뿐만 아니라, 제3자 콘텐츠는 일반 시장 논평으로서 "현재" 기준으로 제공되며, 투자 조언으로 여겨지지 않습니다. 모든 콘텐츠가 투자 리서치로 해석되는 경우, 투자 리서치의 독립성을 촉진하기 위해 고안된 법적 요건에 따라 콘텐츠가 의도되지 않았으며, 준비되지 않았다는 점을 인지하고 동의해야 합니다. 따라서, 관련 법률 및 규정에 따른 마케팅 커뮤니케이션이라고 간주됩니다. 여기에서 접근할 수 있는 앞서 언급한 정보에 대한 비독립 투자 리서치 및 위험 경고 알림을 읽고, 이해하시기 바랍니다.

우리는 웹사이트에서 최고의 경험을 전해드리기 위해 쿠키를 사용하고 있습니다. 자세히 읽거나 쿠키 설정을 변경하세요.

리스크 경고: 고객님의 자본이 위험에 노출 될 수 있습니다. 레버리지 상품은 모든 분들에게 적합하지 않을수 있습니다. 당사의 리스크 공시를 참고하시기 바랍니다.