· Commodity currencies hold firm on hopes of pandemic peak, oil output cut
Commodity currencies drew support on Thursday from hopeful signs the coronavirus pandemic may be peaking and that major oil producers may agree to cut output to stem a plunge in oil prices.
The Australian dollar fetched $0.6225 AUD=D4, down slightly but still near its highest level since mid-March, maintaining most of its gains since rallying from a 17-year trough of $0.5510 touched three weeks ago.
The dollar’s index against six other major currencies stood flat at 100.15 =USD in early Thursday trade.
The index is down 0.6% so far this week as safe-haven flows to the U.S. currency eased on rising hopes much of Europe and the United States could soon see themselves out of the worst period of the COVID-19 pandemic.
“New York reported its biggest death toll while infections hit the highest level in four days in Spain and three days in Italy,” said Tohru Sasaki, head of Japan market research at JPMorgan. “All these are negative but forecasts both from governments and experts that the peak could come within days are leading markets not to focus on those details.”
The market’s focus is now on U.S. initial jobless claims data [USJOB=ECI] due at 1230 GMT.
“Markets already know that the economy is being hit by extraordinary shocks,” said JPMorgan’s Sasaki. “Even if the number increases, it will probably surprise few people while a better reading could enhance the perception that the worst may be over and trigger a bigger market reaction.”
· EUR/USD short-term technical outlook
The EUR/USD pair has been trading range-bound, trapped between Fibonacci levels. The pair bottomed for the day at 1.0830, the 61.8% retracement of the latest daily advance, while sellers are aligned around the 50% retracement of the same rally at 1.0890. In the 4-hour chart, the 20 SMA stands flat at around 1.0830, reinforcing the static support level, while the 100 SMA grinds lower above the current price. Technical indicators hover around their midlines, lacing clear directional strength. Overall, the risk is skewed to the downside, with further declines clearer if the pair breaks below the mentioned 1.0830 level.
Support levels: 1.0830 1.0785 1.0740
Resistance levels: 1.0890 1.0925 1.0960
· Treasury yields edge lower ahead of US jobless claims data
U.S. government debt prices were slightly higher Thursday morning as investors await figures on the number of Americans filing for unemployment.
At around 4:35 a.m. ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, was lower at around 0.7460% while the yield on the 30-year Treasury bond was fractionally lower at 1.3611%.
Market focus also remains attuned to hopes of a peak to the rate of infection, though New York state, America’s epicenter, set another single-day record for deaths on Wednesday.
CORONAVIRUS UPDATES:
Latest on the spread of the coronavirus around the world
Ø Total confirmed cases: More than 1,519,571
Ø Total deaths: At least 88,550
Ø The coronavirus COVID-19 is affecting 209 countries and territories around the world and 2 international conveyances.
Ø US cases: At least 435,160 (+233), and deaths: 14,797 (+9)
Ø Spain cases: At least 148,220, and deaths: 14,792
Ø Italy cases: At least 139,422, and deaths: 17,669
Ø Thailand cases: At least 2,423 (+54), and deaths: 32 (+2)
· This chart shows which European countries are expected to have the highest coronavirus death tolls
Britain will be hit harder by the coronavirus crisis than any other European country, researchers have predicted, with the U.K. expected to see more than 60,000 deaths from COVID-19.
New research from the Institute for Health Metrics and Evaluation (IHME), published Monday with a correction issued on Tuesday, forecast a total of 151,000 deaths across Europe during the “first wave” of the pandemic, which scientists predict will end on August 4.
· Russia’s coronavirus cases rise above 10,000
Russia has reported a record one-day rise of 1,459 new cases of coronavirus Thursday, making the total number of confirmed cases to 10,131.
The number of coronavirus-related deaths rose by 13 to 76, the national coronavirus crisis response center said, adding that it had conducted 1 million tests.
· New cases in Germany jump
The number of new confirmed cases in Germany jumped by 4,974 in the past 24 hours to a total of 108,202, according to data from the Robert Koch Institute for infectious diseases.
The number of additional fatalities rose by 246 to a total of 2,107.
· UBS and Credit Suisse to partially postpone dividend payout
Switzerland’s two big banks, UBS (UBSG.S) and Credit Suisse (CSGN.S), said they decided to pay out part of their dividend for 2019 later this year after financial markets watchdog FINMA had criticised their decision to maintain a full payout during the coronavirus crisis.
· Local schools in Shanghai that have been closed in an effort to contain the spread of the new coronavirus will reopen starting April 27, the director of the city’s education commission said on Thursday.
Lu Jing said classes for the final years of both junior and senior high schools would be permitted to resume on April 27.
Schools should make preparations to resume classes for other grades before May 6, he said, with specific timing to be announced by each school.
· China seeks to contain 'silent carriers' of coronavirus
China released new measures on Wednesday to try and prevent asymptomatic “silent carriers” of coronavirus from causing a second wave of infections, as the country reported another modest rise in new confirmed cases.
The State Council, or Cabinet, on Wednesday published new rules to manage asymptomatic coronavirus carriers, or what some state media described as “silent carriers” of the virus.
Under the regulations, medical institutions must report detection of asymptomatic cases within two hours of their discovery. Local governments must then identify all known close contacts of the case within 24 hours.
· British Prime Minister Boris Johnson’s condition is improving and he is able to sit up in bed and engage with clinical staff, finance minister Rishi Sunak said on Wednesday as Johnson remained in intensive care battling COVID-19.
· The Bank of England has agreed temporarily to finance government borrowing in response to COVID-19 if funds cannot immediately be raised from debt markets, reviving a measure last used to any large degree during the 2008 financial crisis.
· U.S. Democrats, Republicans at odds over next coronavirus aid
Efforts to push a further $250 billion of coronavirus aid for small businesses through the U.S. Congress were stalling on Wednesday as top Democrats said they would back the measure only if it was coupled with a similar amount for hospitals and local governments.
· Jobless claims report Thursday could hit 7 million or higher
The government is set to report another shocking level of unemployment claims Thursday even after nearly 10 million people applied for benefits in the previous two weeks because of business shutdowns from the coronavirus. The number will likely keep increasing, in part because many states are still clearing out backlogs of applications for unemployment aid. And with more companies running through their cash cushions as the virus-related shutdowns persist, they are resorting to layoffs to save money.
Up to 50 million jobs are vulnerable to coronavirus-related layoffs, economists say — about one-third of all the jobs in the United States. That figure is based on a calculation of positions that are deemed non-essential by state and federal governments and that cannot be done from home. It’s unlikely all those workers will be laid off or file a jobless claim. But it suggests the extraordinary magnitude of unemployment that could result from the pandemic.
Beth Ann Bovino, chief economist at S&P Global Ratings, said she thinks layoffs will send the unemployment rate to 15% next month, with at least 13 million jobs lost. Consider that during the Great Recession, which ended in 2009, unemployment never went above 10%.
· Italy could look to ease some of its stringent lockdown restrictions at the end of April, the country’s prime minister has said, once again calling on Europe to help the country at the epicenter of the continent’s outbreak.
It comes as Italy looks to have overcome the worst in terms of daily infections and deaths from the coronavirus, but recent hopes of a peak elsewhere in Europe have been dashed in recent days.
· German Economy Minister Peter Altmaier said he expected European Union finance ministers meeting later on Thursday to make progress towards agreeing a 500 billion euro ($543.20 billion) coronavirus economic rescue package.
· Oil prices rose on Thursday on expectations the world’s largest oil producers would agree to cut production at a meeting later in the day as the industry grapples with a coronavirus-driven collapse in global oil demand.
Brent crude LCOc1 futures rose by almost 2.6%, or 87 cents, to $33.71 a barrel as of 0701 GMT. The contract rose to an intra-day high of $33.90, climbing for a second day.
U.S. West Texas Intermediate (WTI) crude CLc1 futures were up 5%, or $1.27 cents, at $26.36 a barrel, after earlier climbing by as much as 6.1%.
The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia - a group known as OPEC+ - are set to convene a video conference meeting on Thursday.
The meeting is expected to be more successful than their gathering in March, where they failed to agree to extend supply cuts and triggered a price war between Saudi Arabia and Russia.
Reference: CNBC, Reuters, Worldometers, AP
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