Collinsonfx Daily Market Commentary

US equity markets withdrew from record levels and the correction was triggered by fears over the economic impact of the coronavirus. The infections have risen towards 75,000, while deaths up to 2,118, while infections in South Korea doubled! Equities were lower, while US Bond Yields fell and Gold prices jumped, along with the US Dollar. The stronger Dollar is a reflection of a rise in markets fear, with the EUR falling below 1.0800, while the Yen trade 112.00.

The rising reserve hit the trade exposed commodity currencies hard. The trouble started in local markets, when the Australian Unemployment number spiked to 5.3% p.a. and was further fuelled by the PBoC acting to cut interest rates further, in reaction to the coronavirus crises. The AUD has broken through key long term support levels and fallen to decade long lows, trading just above 0.6600. The headline employment rate was a significant hit, despite rising job numbers and participation rates, which should mitigate the impact on markets. The floor for the AUD is now GFC levels, while the NZD also suffered the fallout, plunging to 0.6335.

Markets are now playing on the market volatility and the considered economic impact, surrounding the coronavirus crises, while local economic data accentuates/alleviates these moves.