Collinsonfx Daily Market Commentary

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Daily Market Commentary

US equity markets gapped lower, again overnight, after President Trump warned Americans of a tough two weeks coming, in terms of the 'coronavirus' spread and victims. He warned that models pointed to at least 100,000 deaths coming in the next two to three weeks. This is a staggering number and puts the scale of the crises into perspective. The good news was that the infection rate is beginning to slow in Europe and may be peaking in the US. US economic data is still not fully reflecting the impact of the pandemic, with the ADP Private Sector job losses only registering 27,000 losses, while the ISM Manufacturing number was stronger than expected.

The US Dollar did rebound, with the EUR falling to 1.0930, while the GBP drifted to 1.2350. Commodity currencies are surrendering their recent gains, as the reality of the economic crises becomes more clear. The AUD slipped to 0.6070, while the NZD crashed below 0.5900, in overnight trade. The EU has announced a $100 Billion emergency loan fund for stricken members, while the Fed's FIMO Repo Facility supported treasuries, under extreme selling conditions.

Markets will be watching the infection and death rates in Europe and the USA, to give an indication of how long the economic shut down will continue. Central Banks stand ready to support markets further and National Governments are planning further support/stimulus packages. It is now down to the lock-down policies to monitor the effectiveness on the war on the virus.

Paul Bettany

Collinson Forex

Collinson & Co

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