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Here is what you need to know on Friday 13th March:

Friday 13th is rather fitting considering what just happened on Wall Street. The Dow plunged 10% in what was the worst drop since 1987’s market crash amid the coronavirus fears.  We also had the S&P 500 index and Nasdaq Composite fall into a bear market which officially ended an 11-year-old bull-market.

Investor sentiment has been crushed by the coronavirus that started out in Wuhan, China in December and yesterday’s announcement by US President Donald Trump of a shutdown of travel from the EU for non-US citizens was the icing on the cake. Markets were hoping to an announcement of a stimulus package which never came, sending the market into a tailspin that was in some serious need of a show in the arm.

Then, the focus switch to the European Central Bank. The event disappointed markets as well and the euro sunk as equities continued to bleed out. Later in the day, whatever positives that could be drawn from the ECB’s move to lift asset purchases were overshadowed by the Ne York Fed’s huge open market operations as part of the Fed’s USD1.5tn temporary boost to their Treasury purchase program. Consequently, the dollar sank which gave some relief to the euro and, briefly, to US indexes.

Markets in focus

  • The US 10-year yield was down 8bp into the close.
  • The S&P 500 ended down 9.51%, the DJIA -9.99% and the NASDAQ -9.43%.
  • The DAX closed down an eye-watering 12.2%, and the FTSE down 10.9%.
  • WTI lost 6.58% and sunk to a low of $30.04 on the day – WTI Price Analysis: Magic Fibonacci golden ratio offers support in oil
  • Gold fell 3.38%, dropping a huge 490 form $1650.36 to a low of $1,560.90, balmed on a flight to cash due to margin calls given the equity plunge – NZD/USD posts lowest close since 2009 near 0.6100

FX action

  • NZD/USD posts lowest close since 2009 near 0.6100

  • USD/CHF spikes to 0.9550 and retreats to 0.9450

  • EUR/GBP bulls stay in control, target 0.89 handle

  • EUR/USD collects a strong NY bid from Fed market operations and prospects of Fed QE

  • GBP/USD Price Analysis: Cluster of massive levels offer support after Fed announcement

  • USD/CAD drops below 1.3800 as USD weakens on QE headlines

  • AUD/USD bounces from a fresh one-decade low

  • USD/JPY bulls have eyes on 106 handle, but prospects for Fed QE could be hinderous for bulls

 

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