Archives of “February 2020” month

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Coronavirus FX implications: The good, the static, & the bad

  
Analysis, Forex
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What to watch for in the outbreak

 3 scenarios for Coronavirus and its FX implications.

“Coronavirus was unknown to asset markets two months ago, may disappear as a factor within a few months, but may also evolve into a major global supply shock if it spreads and intensifies. We lay out the alternative scenarios on how the disease could evolve and what the short-medium term FX responses might be. Our subjective assessment is that current asset market pricing probably lies somewhat closer to the static than good scenarios,” SC notes.

“FX winners (W) and losers (L) under our good scenario where the disease abates:

•   W: CAD, CNY, MXN, KRW, IDR, RUB

•   L: USD, CHF, JPY

FX winners (W) and losers (L) under our static scenario of neither major intensification nor elimination:

•   W: USD, JPY, CHF, MXN

•   L: KRW, TWD, THB, SGD, MYR, AUD, NZD, EUR, CNY, CAD

FX winners (W) and losers (L) under our bad scenario where the disease intensifies and spreads:

•   W: JPY, USD

•   L: KRW, TWD, THB, SGD, MYR, IDR, INR, AUD, NZD, EUR, CNY, CAD,”

Hubei reports 2,097 additional coronavirus cases, death toll tops 1000

  
  Analysis
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The latest coronavirus news

The latest coronavirus news
Hubei province announces 2,097 additional coronavirus cases and an additional 103 deaths. That pushed the death toll above 1000.
The pace of news cases is slower than 2,531 a day ago.
In important related news, the Chinese National Health Commission has changed their definition of “confirmed case” in their latest guidelines. Starting from Sunday, those who have tested positive but have no symptoms will no longer be regarded as confirmed. This is in contrast to WHO guidance.
Since then, some provinces have been cutting totals.

North Korea continue to enhance its nuclear and ballistic missile program

  
Analysis, Politics

UN confidential report on the North Korean nuclear and ballistic missile program

A confidential UN report saying:

  • North Korea continue to enhance its nuclear and ballistic missile programs in 2019 in violation of UN sanctions
  • North Korea violated UN sanctions in 2019 by importing refined petroleum and exporting commodities including $370 million worth of coal
Earlier today, it was reported that Pres. Trump said to aides that he does not not want to have another summit with North Korea’s Kim.

S&P and NASDAQ closed at record levels. Major indices go out near highs

  
Analysis, US Market
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NASDAQ index rises by 1.13%

The NASDAQ juggernaut has continued with the index rising by 107.87 points or 1.13% on the day. For the year the index is now up over 7%.
Both the NASDAQ and the S&P closed at record levels today. The Dow industrial average is still short of its all-time record.
The final numbers are showing:
  • S&P index +24.38 points or 0.73% at 3352.09. The high price reached 3352.26. The low extended to 3317.77.
  • NASDAQ index +107.87 points or 1.13% at 9628.39. The high price reached at 9628.66. The low extended to 9493.62.
  • Dow industrial average +174.31 points or 0.60% at 29276.82. The high price reached 29215.00. The low extended to 28850.00

Some of the big winners on the day included:

  • Slack, +15.44%.
  • Lyft, +7.41%
  • AMD, +5.09%
  • Nvidia, +4.51%
  • Chipotle, +3.09%
  • Tesla, +3.06%
  • Amazon, +2.63%
  • Microsoft, +2.59%
  • Boeing, +2.35%
  • Alphabet, +2.00%
  • Cisco, +1.90%
  • General Motors, +1.84%
  • Tencent, +1.8%
  • Square, +1.7%
  • Visa, +1.64%
  • Home Depot, +1.39%
Some of the underperformers during today’s trading day include:
  • Twitter, -2.89%
  • Exxon Mobil, -2.47%
  • DuPont, -1.48%
  • Charles Schwab, -1.14%
  • Walmart, -1.03%
  • Deutsche Bank, -0.96%
  • United health, -0.76%
  • Pfizer, -0.63%
  • Emerson, -0.52%
  • AliBaba, -0.38%

EUR/CHF threatens a three-year low as some risk aversion creeps in

  
Analysis, Forex
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The euro is soft on all fronts

The euro is the laggard today as the pain trade continues for euro bulls.
EUR/CHF is no exception as the pair threatens the low of the year at 1.0663. We’re just 5 pips from there now and if that breaks, the next big support level is the 2017 low of 1.0632.
The euro is soft on all fronts

More risk aversion is creeping in today as the minutes tick by. Stocks in the US are holding up but Treasury yields are sliding and gold is climbing.

European shares start the week with modest declines

  
Analysis, Global Indices

Major indices close with small declines

The European shares are starting the week with modest declines. A look at the provisional closes are showing:

  • German DAX, -0.18%
  • France’s CAC, -0.22%
  • UK’s FTSE 100, -0.26%
  • Spain’s Ibex, unchanged
  • Italy’s FTSE MIB bucked the trend with a gain of 0.1%
In the European debt market, the benchmark 10 year yields are ending mostly lower. The exception is the Italian 10 year yield which eked out a 0.5 basis point gain.
Major indices close with small declines 
In other markets as London/European traders look to exit.
  • The EURUSD is trading at session lows and down 34 pips on the day
  • The EURGBP is also trading near lows at down 43 pips on the day
  • The GBPUSD is higher but off its NY session high at 1.29455. The current price is trading at 1.2913.
  • The GBP is the strongest of the majors, while the EUR is the weakest.
  • The USDJPY, USDCHF and AUDUSD are trading within 3 pips of the Friday close
  • The USDCAD is trading just off its high for the day after moving down about 20 pips into the London morning session, only to snap back higher (and trade up about 20 pips) in the New York session
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