Last session market review
On Tuesday, the dollar extended its gains and rose to a new session high of 99.84. At one point, gold was above the $1,550 mark, up nearly $90 since the day’s lows. U.S. stock indexes rallied violently, with NASDAQ up more than 5%.
This trading day next focus on the eurozone CPI monthly rate and annual final value in February, January quarter after the trading account; The total number of new housing starts in February was annualized and the total number of permits issued in February.
Fx: Eur/USD 1.0995; The pound closed at 1.2049; The Australian dollar closed at 0.5998; The dollar closed at 107.68 yen; Us $1.4199; The dollar was last at 0.9609 Swiss francs.
Commodities: spot gold closed at $1,514.06 an ounce; Comex gold ended at $1,486.50 an ounce; Spot silver settled at $12.59 an ounce; Comex silver ended at $12.495 an ounce; Brent crude settled at $28.73 a barrel; NYMEX crude closed at $26.95 a barrel.
In the currency market
Euro: the previous session’s strong rally in the euro/dollar failed to hold as the dollar’s gains resumed, closing down at 1.0995 on Tuesday. On the technical level, the pivot point of the currency pair is 1.1047, the initial resistance to the upward movement of the exchange rate is 1.1139, the further resistance is 1.1281, and the key resistance is 1.1374. The initial support of the exchange rate down at 1.0904, further support at 1.0812, more critical support at 1.0669.
Sterling: the sell-off in sterling/dollar continued, with the pair falling for the sixth day in a row to close at 1.2049 on Tuesday. On the technical plane, the pivot point of the currency pair is at 1.2108, the initial resistance of the exchange rate upward is at 1.2216, the further resistance is at 1.2381, and the more critical resistance is at 1.2489. The initial support of the exchange rate down in 1.1944, further support in 1.1836, more critical support in 1.1671.
Yen: dollar/yen closed strong against the dollar, closing at 107.68 on Tuesday. On the technical plane, the pivot point of the currency pair is 107.11, the initial resistance to the rise of the exchange rate is 108.31, the further resistance is 109.17, and the more critical resistance is 110.47. The initial support of the exchange rate down at 106.35, further support at 105.05, more critical support at 104.29.
The stock market
U.S. and European stocks rallied sharply Tuesday, recovering from their worst day in more than 30 years, as Wall Street was buoyed by a White House plan that could pump $1 trillion into the U.S. economy to cushion the blow of the coronavirus. The dow jones industrial average closed up 1,048.79 points, or 5.2%, at 21,237.31. The index briefly fell below 20,000 for the first time since February 2017 before rebounding. The s&p 500 rose 6% to 2,529.19, while the NASDAQ composite index rose 6.2% to 7,334.78.
The rapidly spreading coronavirus has raised fears among investors that a recession is imminent, prompting hopes for more stimulus. European shares closed higher on Tuesday after a day of wild swings. The pan-European Stoxx 600 fell after opening up 3 percent, closing up 2.2 percent in volatile trading. Travel and leisure stocks fell about 6 percent from their earlier lows as the travel industry continued to be hit by business failures. Meanwhile, Spain’s IBEX index temporarily closed up 9.2%.
The bond market
The White House is said to be considering a fiscal stimulus of more than $1 trillion to offset the negative impact of the coronavirus outbreak on the economy. The yield on the benchmark 10-year Treasury note bounced above 1% on Tuesday on the news. The yield on the benchmark 10-year Treasury note jumped nearly 30 basis points to 1.038 percent, its highest level since March 5. Investors are betting that the stimulus will give the economy a boost as it fights a possible coronavirus recession. The yield on the 30-year Treasury note rose by a similar margin to 1.62 percent.
International spot gold opened at $1554.70 an ounce in early trading on Monday, rising more than $20, but then quickly fell to around $1524 before recovering slightly from the lows and maintaining a tight range. In the European session, gold prices began to fall, dropping about $90 from around $1,540 to a new low of $1,450.90 an ounce. In early trading, gold bounced nearly $70 from its low to just below $1,520 before retreating slightly to close at $1,514.06 an ounce.
COMEX April gold futures ended down $30.20, or 2.0%, at $1,486.50 an ounce, the lowest close since December 2019.
U.S. WTI crude for April delivery closed down $1.75, or -6.585 percent, at $26.95 a barrel on Tuesday. That was the lowest close for a front-month contract since February 2016, according to Dow Jones market data. Brent may futures closed down $1.32, or 4.4 percent, at $28.73 a barrel on Friday, the lowest settlement price since January 2016. U.S. WTI crude futures hit an intraday low of $26.63 a barrel, while Brent crude hit an intraday low of $28.50. Traders focused on the huge impact of the new global pandemic on demand for crude oil, as well as increased supplies from a global price war between Russia and Saudi Arabia.