There are signs the escalating coronavirus outbreak has begun to weigh on business sentiment in the United States, a report by the Federal Reserve released on Wednesday showed, even as the US economy expanded at a modest to moderate pace over the past several weeks.
Highlights of the Beige Book
- There were indications virus impacted travel and tourism.
- Virus delays some supply chains, producers fear disruption.
- Most districts saw modest growth in selling prices.
- Hiring was constrained by a tight labor market.
- US consumer spending generally picked up but it was uneven across nation.
Full report
What is The Beige Book?
The Beige Book is a Federal Reserve System publication about current economic conditions across the 12 Federal Reserve Districts. It characterizes regional economic conditions and prospects based on a variety of mostly qualitative information, gathered directly from District sources. The qualitative nature of the Beige Book creates an opportunity to characterize dynamics and identify emerging trends in the economy that may not be readily apparent in the available economic data. Because this information is collected from a wide range of business and community contacts through a variety of formal and informal methods, the Beige Book.
FX implications
Considering the market is already positioned, and how the data from this report was collected prior to the real fears of an actual global pandemic, markets have ignored this event. The Fed slashed interest rates by a half percentage point on Tuesday in an emergency move to mitigate the possible economic effects of the virus on the world’s largest economy. The dollar is under pressure considering the door was left open to further measures should they be required. The USD/JPY and EUR/USD are in focus from a technical and fundamental standpoint as follows:
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EUR/USD Price Analysis: Bears lurking, lower highs, lower lows, 1.0997 eyed
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USD/JPY stabilizing with the case made for a POC and 61.8% Fibo target between 110.08/17
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