Archives of “March 12, 2020” day

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White House says no need for Trump and Pence to be tested for coronavirus

  
  Analysis

That’s comforting

The White House is aware of reports a Bolsonaro aide tested positive for COVID-19, although the “confirmatory testing is pending,” Stephanie Grisham says. Trump and VP “had almost no interactions” with him “and do not require being tested at this time.”
I don’t understand this. Do they think that announcing they were being tested would spread some kind of panic? It just looks irresponsible.

ECB leaves rates unchanged, announces new LTRO, expands QE by 120B

  
  Analysis
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ECB announces measures

No changes in any rates
  • ECB raises monthly bond purchases by 120B by year-end (not per month)
  • Additional LTROs will be conducted to provide immediate liquidity
  • Says considerably more favourable terms will be applied during period from June 2020 to June 2021
  • Rates on new LTROs will be 25 bps below average rate applied in eurosystem’s main refinancing operations
  • Raises amount taht counterparties can borrow in LTROs to 50% of their stock of eligible loans
  • Continue to expect QE programs to run as long as necessary and end shortly before ECB ready to raise rates
The market was sniffing around for an interest rate cut and it didn’t come. The euro has risen

EURUSD falls to a new low

  
Analysis, Forex

Price moves below its 200 hour MA ahead of the ECB decision.

The EURUSD has moved to a new session low on the day.  The low just reached 1.12081. Headlines that Germany is ready to ditch balanced-budget to combat coronavirus is so far not giving the EUR a boost. The ECB decision will be out shortly where they are expecting to cut rates and potentially announce more QE and liquidity measures.
The price of the EURUSD remains below its 200 hour moving average. That is close risk for the pair now. The lows from March 6 and March 20 at 1.1273-78 are also risk for shorts. The topside channel trend line comes in at 1.13035. Staying below those levels still more bearish technically, and keeps the sellers more in control.
Price moves below its 200 hour MA ahead of the ECB decision.

On the downside the 1.1183 area is the next target, followed by the downward sloping channel trendline at 1.1170.  Below that the 50% retracement of the move up from the February 21 low comes in at 1.11368 and the 200 day moving average comes in at 1.10995.

Ifo says more than half of German firms have been hit by fallout from the virus outbreak

  
  Analysis
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Ifo institute with their latest survey among 3,400 German firms

Germany
  • 56% are suffering from negative effects from the virus outbreak
  • 63% of manufacturing and trade companies said they were negatively affected
  • Problems from postponement of business trips, supply chain issues, lower demand
  • 96% of firms in the tourism sector, 79% in hospitality sector said they were affected
It is but a small sample size and I would argue that the negative implications don’t just apply to one particular country. It is pretty much the same all across the globe and the impact is much worse on countries like Italy, Japan and South Korea.

US Congress’ attending doctor says expects coronavirus infections to number 70 to 150 million

  
  Analysis
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US media report on ‘closed meeting’ comments from Dr. Brian Monahan, the attending physician of Congress and the U.S. Supreme Court.

  • a closed-door meeting Tuesday that included Senate administrative office staff and personnel from both parties
The report adds:
  • Marc Lipsitch, professor of epidemiology at Harvard, said earlier this month that he thinks about 40% to 70% of the world’s population could become infected with the virus, and of those, 1% will die
1% of 70 million (let alone the upper estimate) is 700,000 dead.

Coronavirus – CME will close its Chicago trading floor at end-Friday

  
  Analysis
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Floor will close indefinitely. Globex trade to continue.

  • CME group to close Chicago trading floor as a precaution
  • reopening of trading floor will be evaluated as more medical guidance on coronavirus becomes available
  • will close its Chicago trading floor as of close of business Friday, March 13, 2020, as a precaution to reduce large gatherings
  • no coronavirus cases have been reported on trading floor or in Chicago board of trade building
  • company’s headquarters will remain open
  • all products will continue to trade on CME Globex as they do today.

Coronavirus – Italy has ordered all shops to close, except pharmacies and groceries

  
  Analysis
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Factories can continue to work (with adequate precautions)

More:
  • food deliveries will still be permitted
  • all cafes/restaurants will be closed unless can guarantee at ;east 1 metre distance between customers
  • public services like post, transport remain
PM Conte hopeful effects will be seen, may take a couple of weeks. Adds that if cases rise near term it does not mean even tighter restrictions

US major indices hit bear market levels today

  
Analysis, US Market

Intraday lows reach -20%

The US major indices all hit bear market levels today (-20% from the all time highs).
  • The S&P index -20% level comes in at 2714.81. The low reached 2707.22
  • The Nasdaq index -20%  level comes in at 7870.69. The low reached 7850.945
  • The Dow -20% level comes in at 23654.85. The low reached 23328.32.
The closing levels for the day are showing:
  • S&P index -140.85 points or -4.89% at 2741.38. The low reached 2707.22. The high extended to 2825.60
  • Nasdaq index fell minus 392.20 points or -4.7% at 7952.05. The low for the day reach 7850.945. The high extended to 8181.35
  • Dow fell -1464.94 points or -5.86% at 23553.22. The low for the day reached 23328.32. The high for the day extended to 24604.63
In addition to each of the major indices falling over 20% from the high, the Dow industrial average fell below its 200 week moving average at 23619.19. The price also close below that 200 day moving average.   If the week closes below the 200 week moving average, it would be the 1st time since October 1, 2010.
The NASDAQ index is also dipped below its 100 week moving average at 7906.97. The price closed above that moving average level.
The next major target for the S&P is at its 200 week moving average at 2640.22. The low price today at 2707.22 is still 67 points away.
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