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The risk sentiment saw a sharp turnaround in late Asia this Friday, as investors seemed to cheer the coronavirus relief measures deployed by the global central banks, including the Bank of Japan (BOJ), to stabilize the markets stifled by the virus. The BOJ announced unscheduled liquidity injections of JPY 500billion and JPY 200billion via reverse repos and JGBS respectively.

The Asian equities recovered early losses, with Japan’s Nikkei 225 index back near 18k mark while the Australian stocks jumped nearly 5%. The risk recovery was also reflected by a 3+% rebound in the S&P 500 futures while the US Treasury yields also trimmed a major part of the initial sell-off. Meanwhile, gold prices also bounced-back above $1590 levels, having hit the lowest levels in five weeks near $1551.

Across the fx board, the Aussie emerged as the top performer amid risk recovery and pre-emptive measures announced by the Australian PM Morison against the virus. AUD/USD rebounded over a bog figure from a new decade low of 0.6213 to 0.6327. The Kiwi also followed suit jumped above 0.6100. Meanwhile, USD/CAD shaved-off gains and fell 0.40% to the sub-1.39 region as oil rebounded 2% on improvement in the market mood.

Among the European currencies, EUR/USD regained the 1.12 handle while the cable headed back to the five-month low despite a broadly subdued US dollar, as coronavirus fears continued to dominate.

Main topics in Asia

Coronavirus update: No coronavirus Task Force Briefing from US, Ohio health official estimates more than 100,000 cases

US Senate delays decision on the coronavirus relief bill to next week

Canadian Finmin Morneau: Still planning on presenting its budget on March 30 even amid coronavirus concerns – Reuters

New Zealand PM, Ardern: No community transmission in the country

BOJ offers to buy ¥500 billion in unscheduled repo operation

BOJ announces unscheduled buying of JPY 200 bln JGBs, USD/JPY unfazed around 105

US House Speaker Pelosi: Lawmakers, WH have neared agreement on coronavirus legislative package – Reuters

Asian stocks portray the coronavirus carnage, NIKKEI inches closer to -10%

South Korea confirms 110 new coronavirus cases, LatinAm countries ramp up measures

Japan’s Aso: Closely watching market moves

BOK, S. Korea Govt: Will deploy appropriate measures if needed

China’s NHC: Mainland reports 8 new confirmed coronavirus cases, 7 new deaths

Australian PM Morrison advises against gatherings of more than 500 people to contain coronavirus

Key focus ahead       

The main market driver will continue to remain the coronavirus led risk sentiment on the global markets.

On the data front, the immediate focus remains on the German Final Consumer Price (CPI) data, due at 0700 GMT. Later in the day, the Bank of England (BOE) will release the minutes of its emergency 50bps rate cut decision announced on Wednesday.

In the NA session, the only data of relevance is the US Preliminary Michigan Consumer Sentiment Index, dropping in at 1400 GMT ahead of the Baker Hughes oil rigs count data due for release at 1700 GMT.

EUR/USD: Back above 1.12 amid increased global recession fears

EUR/USD has moved back above 1.12 ahead of the London open and could continue to draw haven bids amid heightened fears of a global recession. As a result, investors are likely to continue rotating money out of risk currencies and into the haven currencies like the EUR.

GBP/USD nears five-month low amid global rout, BOE minutes in focus

GBP/USD remains on the back foot for the fourth day in a row. Coronavirus carnage continues, leads to cancellation of the next week’s EU-UK talks. BOE minutes might offer intermediate clues, virus headlines can dominate.

Gold: Prints 5-week low, bearish engulfing candle on weekly

Gold prints lowest level since Feb. 5, having dropped for a third straight day on Thursday. The weekly candle has neutralized the broader bullish outlook. A minor corrective bounce may be seen as intraday charts are reporting bullish divergences.

US Michigan Consumer Sentiment March Preview: Where will consumers lead?

March sentiment expected to fall but remain healthy. Michigan Survey first to include virus impact. Financial market turmoil may color consumer outlook.

 

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