News & Analysis
News & Analysis

Overnight on Wall Street: Thursday 12/03/2020

11 March 2020 By Deepta Bolaky


Equity Markets

The World Health Organisation declared the COVID-19 a global pandemic which brought another round of extreme volatility in the markets. Wall Street witnessed another dreadful day and was in a sea of red as a lack of details on the stimulus program dampened risk sentiment.

Widespread fears caused major equity benchmarks to fall into bear market territories. The drumbeat of bad news is resonating in the financial markets while investors await for actions from government and central bankers to shore the global economy.

World Equity Indices (% Change)

Source: Blomberg Terminal

  • Dow Jones Average Industrial lost 1,465 points or 5.9% to 23,553.
  • S&P500 fell by 141 points or 4.9% at 2,741.
  • Nasdaq Composite ended 392 points or 4.7% lower at 7,952.

Source: Bloomberg Terminal

Currency Markets

In the FX market, major currencies were weaker against the US dollar. As the attention remains primarily on the widespread of the virus, traders are piling into safe-haven assets in anticipation of stimulus intervention in the markets.

The Japanese Yen and the Swiss franc were stronger against the greenback backed by haven demands.

Source: Bloomberg Terminal

The Bank of England joined its peers in slashing interest rates and made a 50 bps emergency interest rate cut. The GBPUSD pair fell below the 1.29 level as traders were unimpressed by the rate cut and the proposed spending.

GBPUSD (Hourly Chart)

Source: GOMT4

Oil & Gold

Oil market remained under pressure due to a demand and supply shock combined with a price war between Russia and Saudi Arabia. Both parties also plan to increase oil production capacity. As of writing, WTI and Brent Crude has consolidated in the vicinity of  $33 and $36 respectively. Traders will be watching closely for signs or attempts to mediate a truce in the coming days for fresh trading impetus.

UKOUSD and USOUSD (Hourly Chart)

Source: GO MT4

Despite the risk-off environment, Gold struggled to edge higher dragged by a stronger US dollar. Given the current uncertainties, the downside might be limited unless the hopes of stimulus matched expectations.

Any meaningful pullback might still be seen as a buying opportunity. However, traders need to continue to monitor developments on the virus to gauge if there is any improvement.

XAUUSD (Weekly Chart)

Source: Bloomberg Terminal 

Key Upcoming Events

Consumer Inflation Expectations (Australia)
Foreign Direct Investment (China)
Industrial Production, ECB Interest Rate Decision, Monetary Policy Statement and Press Conference (Eurozone)
Westpac Consumer Survey and Business NZ PMI (New Zealand)

Friday, 13 March 2020 
Indicative Index Dividends
Dividends are in Points
ASX200 WS30 US500 US2000 NDX100 CAC40 STOXX50
0.584 14.243 0.83 0.278 0.104 0 0
ESP35 ITA40 FTSE100 DAX30 HK50 JP225 INDIA50
0 0 0 0 0 0 0

Disclaimer: Articles are from GO Markets analysts and contributors and are based on their independent analysis or personal experiences. Views, opinions or trading styles expressed are their own, and should not be taken as either representative of or shared by GO Markets. Advice, if any, is of a ‘general’ nature and not based on your personal objectives, financial situation or needs. Consider how appropriate the advice, if any, is to your objectives, financial situation and needs, before acting on the advice. If the advice relates to acquiring a particular financial product, you should obtain and consider the Product Disclosure Statement (PDS) and Financial Services Guide (FSG) for that product before making any decisions.