News

Europe Roundup: Euro dips against dollar as surging COVID-19 spells disaster for global growth, European shares falls, Gold eases, Oil prices rise, but doubts remain on Russia-Saudi deal-April 3rd 2020

Posted at 03 April 2020 / Categories Market Roundups


Market Roundup

• Italian March Services PMI  17.4, 22.0 forecast, 52.1 previous

• French March Services PMI  27.4, 29.0 forecast, 52.5 previous 

• German March Services PMI  31.7, 34.3 forecast, 52.5 previous             

• EU March Markit Composite PMI  29.7, 31.4 forecast, 51.6 previous     

• EU March Services PMI  26.4, 28.4 forecast, 52.6 previous         

• UK March Composite PMI  36.0, 36.2 forecast , 53.0 previous  

• UK March Services PMI  34.5, 34.8 forecast, 53.2 previous        

• EU Feb Retail Sales (MoM) 0.9%,0.1% forecast, 0.7% previous

Looking Ahead - Economic Data (GMT) 

• 12:30 US March Average Hourly Earnings (YoY) (YoY)  3.0% forecast, 3.0% previous

• 12:30 US March Average Hourly Earnings (MoM)  0.2% forecast, 0.3% previous

• 12:30 US March Nonfarm Payrolls -100K forecast, 273K previous

• 12:30 US March Participation Rate  63.3% forecast, 63.4% previous

• 12:30 US March Private Nonfarm Payrolls  -163K forecast, 228K previous

• 12:30 US March U6 Unemployment Rate  7.0% previous

• 12:30 US March Unemployment Rate  3.8% forecast, 3.5% previous

• 13:45 US March Markit Composite PMI 40.5 forecast, 49.6 previous

• 13:45 US March Services PMI  39.1 forecast, 49.4 previous

• 14:00 US March ISM Non-Manufacturing PMI  44.0 forecast, 57.3 previous                       

Looking Ahead - Events, Other Releases (GMT)

• No significant events 

Fxbeat

EUR/USD: The euro declined against dollar on Friday as the number of global coronavirus cases exceeded 1 million, while doubts about a U.S.-brokered deal between Russia and Saudi Arabia regarding oil prices also lingered. Surging numbers of infections signal a prolonged period of significantly subdued economic activity as more containment measures may be required to curb the virus.Recent economic indicators around the globe have already made a sharp turn lower. Immediate resistance can be seen at 1.0904 (11 DMA), an upside break can trigger rise towards 1.0934 (5 DMA).On the downside, immediate support is seen at 1.0754 (23.6% fib), a break below could take the pair towards 1.0700 (Psychological level).

GBP/USD: Sterling fell 1% on Friday after a record slump among Britain’s services and manufacturing firms deepened in late March as businesses and households paused activity to prevent the spread of the coronavirus. The final composite Purchasing Managers’ Index covering the two sectors fell to 36.0 from a preliminary “flash” reading of 37.1, and 53.0 in February. Sterling was last down 1% at $1.2263, its weakest level since Tuesday. Against the euro, it fell 0.4% to 87.95 pence.As COVID-19 spread around the world, claiming more victims and effectively shutting down many cities, the pound sunk to its weakest in decades last month as investors turned to less risky currencies, such as the U.S. dollar. Immediate resistance can be seen at 1.2307 (50% fib ), an upside break can trigger rise towards 1.2521 (61.8% fib).On the downside, immediate support is seen at 1.2090 (38.2 %fib), a break below could take the pair towards 1.2000 (Psychological level ).

USD/CHF: The dollar edged higher against the Swiss franc on Friday as investors took refuge in greenback amid worsening economic fallout from the coronavirus pandemic. The greenback index is on course for a near 2.5% gain over the week, having whipsawed last month from highs on a scramble for cash before slumping as the U.S. Federal Reserve flooded the market with liquidity. At (GMT 12:15), Greenback was up 0.41% versus the Swiss franc to 0.9774. Immediate resistance can be seen at 0.9780 (Daily high), an upside break can trigger rise towards 0.9814 (23.6 % fib).On the downside, immediate support is seen at 0.9750 (50% fib), a break below could take the pair towards 0.9660 (61.8% fib).

USD/JPY: The dollar strengthened against the Japanese yen on Friday as  demand for dollar incresed on a worsening global economic outlook. The rout in financial markets and near-certain global recession caused by the coronavirus pandemic has caused a scramble to secure dollar funds The demand for safe-haven assets has pushed the dollar to rise about 3.5% so far this year and register its best first-quarter performance since 2015. Strong resistance can be seen at 108.56 (50% fib), an upside break can trigger rise towards 109.49 (61.8% fib).On the downside, immediate support is seen at 107.76 (38.2% fib), a break below could take the pair towards 106.71 (23.6% fib).

Equities Recap

European stock markets headed lower on Friday, erasing meagre gains for the week, as more companies flagged a hit to business from the coronavirus pandemic, foreshadowing a deeper earnings recession ahead of the reporting season.

At (GMT 12:15),UK's benchmark FTSE 100 was last trading down at 0.60 percent, Germany's Dax was up by 0.23 percent, France’s CAC was last down by 0.41 percent.

Commodities Recap

Gold prices were subdued on Friday as the dollar strengthened, but they were stuck in a narrow range ahead of U.S. nonfarm payrolls data that could provide further clarity on the economic damage from the coronavirus.

Spot gold was down 0.1% at $1,610.46 per ounce by 0923 GMT. The metal has declined nearly 0.5% so far this week after an 8% jump in the previous week.U.S. gold futures dropped 0.6% to $1,627.90 per ounce.

Benchmark Brent crude oil futures rose as high as $33.37 a barrel on Friday on rising hopes of a new global deal to cut global crude supply.

Brent crude futures were up 8.9%, or $2.67, at $32.61 a barrel by 1134 GMT. Brent soared as much as 47% on Thursday for its highest intraday percentage gain on record. It closed 21% up, still about half the $66 at which it was trading at the end of 2019.

U.S. West Texas Intermediate (WTI) crude also returned to positive territory, rising 4.4%, or $1.11, to $26.43 after advancing by 24.7% on Thursday.

Treasury Recap

Borrowing costs in the euro area were steady to a touch lower on Friday, as news that global coronavirus cases have now surpassed 1 million weighed on investor sentiment and supported safe-haven assets.

In early Friday trade, most 10-year bond yields in the bloc were 1-2 bps lower on the day amid still dire news on the coronavirus.

Germany’s 10-year Bund yield was just a touch lower at -0.44%, holding well below highs hit last month at -0.14%.


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