Financial market daily

Last trading session review

The dollar index extended losses in early Asian trading to hit a low of 97.84. International spot gold, meanwhile, was choppy in the short term, retreating more than $17 from a high of $1,592.90 an ounce earlier to $1,575.36 and currently just above the $1,580 mark.

The new outbreak of pneumonia will be followed in the evening by the release of the ISM manufacturing PMI for February in the United States and the opening of the first round of trade talks between the United Kingdom and the European Union through March 4.

Fx: eur/usd close at 1.1025; GBP/usd closed at 1.2820; Australian dollar/us dollar 0.6509; Usd/jpy 108.07; Usd/cad closed at 1.3396; Dollar/Swiss franc closed at 0.9652.

Commodities: spot gold at $1589.90 / oz; Comex gold closed at $1,566.70 an ounce; Spot silver at $16.66 an ounce; Comex settled at $16.457 an ounce; Brent crude closed at $50.52 a barrel; NYMEX crude closed at $44.76 a barrel.

In the currency market

The euro closed at 1.0972 in New York and continued to rebound during the session, ending the week up 1.68 percent at around 1.1025. From the technical side, MACD red momentum column stretch, KDJ indicator high continues to rise, indicating that the exchange rate is expected to continue the rebound momentum. The initial resistance to the upward movement of the exchange rate is 1.1045, the further resistance is 1.1090, and the key resistance is 1.1174. The initial support for the decline of the exchange rate was 1.0916, further support was 1.0831, and the more critical support was 1.0786.

GBP/USD: this session started at 1.2836 and retreated moderately during the session to close around 1.2820, down 1.15% for the week. Technically, the MACD green kinetic energy column is expanding steadily, while the KDJ indicator is turning upward below the centerline, indicating that the recent downward kinetic energy of the exchange rate is shrinking. The initial resistance to the upward movement of the exchange rate is 1.2934, the further resistance is 1.2983, and the more critical resistance is 1.3021. The initial support for the decline of the exchange rate is located at 1.2847, further support is located at 1.2810, and more critical support is located at 1.2760.

Dollar/yen: the session started at 108.50 and continued to fall throughout the session, ending around 108.07, down 3.14% for the week. From the technical point of view, the MACD green kinetic energy column has been greatly stretched, and the KDJ index has been deeply lowered, indicating that the downside risk of the exchange rate is still large. The initial resistance to the upward trend of the exchange rate is at 110.17, the further resistance is at 110.76, and the more critical resistance is at 111.06. The initial support for the decline of the exchange rate is at 109.27, further support is at 108.97, and the more critical support is at 108.38.

The stock market

U.S. and European stocks: U.S. stocks fell again Friday, capping their worst week since the financial crisis, as concerns about the new coronavirus and its impact on the economy continued to unnerve investors. The dow fell 357.28 points, or more than 1%, to 25,409.36. At one point, the 30-stock Dow fell more than 1,000 points before closing higher in the usual frenzied session of the week. The s&p 500 fell 0.8 percent to 2,954.22. The NASDAQ ended flat at 8,567.37, but down as much as 3.5% for the day.

European stocks extended a week of losses on Friday as the new outbreak continued to hit global markets and push them into correction territory. The pan-European Stoxx 600 index closed 3.8 percent lower after a global sell-off. The benchmark index fell about 12.7% this week, its biggest drop since the depths of the global financial crisis in October 2008. All sectors and major exchanges posted losses, led by the basic resources sector, which fell 4.6 percent. Britain’s FTSE 100 fell 3.7%, France’s CAC 40 fell 4% and Germany’s DAX fell 4.5%.

The bond market

On Friday, amid the outbreak of the new coronavirus, U.S. 10-year Treasury yields fell to record lows as investors sold riskier assets and sought safer investments. The benchmark rate was 1.116 percent, the first time it has fallen below 1.2 percent. The yield on the two-year note fell to 0.874%, its lowest level since November 2016. Yields move inversely to bond prices, which rise as buying surges. The yield on the 10-year us Treasury has plunged more than 30 basis points this week alone as the massive equity sell-off intensified.

Commodity markets

International spot gold opened at $1, 644.53 an ounce on Friday morning before continuing to fall slightly. Gold continued its retreat in early trading, hitting the $1, 620 level before settling in a tight range. Gold accelerated its decline by nearly $70 to a fresh session low of $1,562.80 an ounce, before recovering from its low to close at $1,589.90.

COMEX gold for April delivery closed down $75.80, or 4.6%, its biggest one-day drop in nearly seven years at $1,566.70 an ounce, down 5.0% for the week and more than 1% for February as a whole.

U.S. WTI crude for April delivery closed down $2.33, or 5 percent, at $44.76 a barrel on Friday, after plunging more than 16 percent this week, its biggest weekly decline since December 19, 2008. Brent crude for April delivery closed down $1.66, or 3.2 percent, at $50.52 a barrel on Friday, down nearly 14 percent for the week, its biggest weekly decline since January 15, 2016. Contagion fears continued to hit risk assets, with U.S. oil Posting its biggest weekly decline in more than 11 years. U.S. WTI crude hit an intraday low of $43.85 a barrel, while Brent hit an intraday low of $50.05.

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