News & Analysis

Overnight on Wall Street: Thursday 19/03/2020

March 19, 2020

By Deepta Bolaky
 @DeeptaGOMarkets

Equity Markets

Wall Street witnessed another trading halt on Wall Street as the S&P500 fell by more than 7% as the world is slowing going into lockdown. The widespread of the virus and more stringent quarantine measures are weighing heavily of investors’ sentiment.

Investors are rushing to exit riskier assets as panic-selling gripped the financial markets.

As more countries are rolling massive stimulus package to stem the crisis, investors are not convinced that the fiscal and monetary intervention measures are enough to provide economic support to the global economy.

  • Dow Jones Average Industrial lost 1,338 points or 6.30% to 19,899.
  • S&P500 fell by 131 points or 5.2% at 2,398.
  • Nasdaq Composite ended 345 points or 4.70% lower at 6,990.

Currency Markets

In the FX market, the greenback was stronger against the G10 currencies bolstered by its haven status. We saw big movements in the currency markets as the numbers of cases rising at a faster pace across Europe, US and other major countries.

Commodities currencies like the Antipodeans and the Canadian dollar was among the worst performers due to weak commodities prices.


Source: Bloomberg Terminal

The Australian dollar is trading at an 18-year low against the US dollar. The local currency is struggling to find a floor another wave of global easing hits the markets. The much-awaited stimulus package also fell short of expectations. As of writing, the AUDUSD pair is currently at 0.57. Attention is now on the employment reports to be released on Thursday morning.

The British Pound was also under intense pressure on Wednesday. As countries are ramping up efforts to contain the widespread of the virus, the UK government appears to be taking a softer approach which did not bode well with traders. The GBPUSD pair dropped to 1.16 level

Oil & Gold

The oil market is struggling to find a reason to bound. Trapped in an oil price war, oil prices were already on the defensive dragged by the fundamental challenges prevailing in the industry. As of writing, both Brent Crude and WTI are trading to $27 and $24 levels.

UKOUSD and USOUSD (Hourly Chart)


Source: GO MT4

As the impact of the coronavirus rattles markets, global central bankers and governments are ramping up efforts to address liquidity issues across markets. When investors are in search of liquidity,  not uncommon for gold to act as a source of liquidity at the start of a liquidity crisis. 

Faced with an unexpected crisis that took the markets into a turmoil seen in years, investors are liquidating gold to meet liquidity obligations. The XAUUSD pair erased gains made earlier this year and is currently trading at $1,497.

XAUUSD (6-Month Chart)


Source: Bloomberg Terminal 

Key Upcoming Events

National Consumer Price Index (Japan)
Fulltime Employment, Employment Change, Unemployment Rate and RBA Bulletin (Australia)
All Industry Activity Index and BoJ Press Conference (Japan)
SNB Monetary Policy Assessment and Interest Rate Decision (Switzerland)
Philadelphia Fed Manufacturing Survey, and Initial Jobless Claims (US)

Friday, 20 March 2020 
Indicative Index Dividends
Dividends are in Points
ASX200WS30US500US2000NDX100CAC40STOXX50
000.40.0121.27700
ESP35ITA40FTSE100DAX30HK50JP225INDIA50
0000000

Disclaimer: Articles and videos from GO Markets analysts are based on their independent analysis. Views expressed are of their own and of a ‘general’ nature. Advice (if any) are not based on the reader’s personal objectives, financial situation or needs.  Readers should, therefore, consider how appropriate the advice (if any) is to their objectives, financial situation and needs, before acting on the advice.

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