CORONAVIRUS CRISIS:
Ø Total confirmed cases: More than 3,002,887
Ø Total deaths: At least 207,080
Ø The coronavirus COVID-19 is affecting 210 countries and territories around the world and 2international conveyances: the Diamond Princess cruise ship harbored inYokohama, Japan, and the Holland America's MS Zaandam cruise ship.
Ø US cases: At least 987,322 (+162) and deaths: 55,415 (+2)
Ø Thailand cases: At least 2,931 (+9) and deaths: 52 (+1)
- Italy will allow factories and building sites to reopen from May 4 and permit limited family visits as it prepares a staged end to Europe’s longest coronavirus lockdown, Prime Minister Giuseppe Conte said on Sunday.
· The yen edged higher on Monday after the Bank of Japan expanded stimulus to help companies hit by the coronavirus crisis while the pound rose against the dollar and euro on optimism Britain may soon ease a month-long lockdown.
The BOJ’s decision to remove limits on its government bond purchases and increase corporate debt buying was widely expected and puts it in line with other major central banks that have unleashed unprecedented amounts of monetary support
Traders now shift their focus to a U.S. Federal Reserve meeting ending Wednesday and a European Central Bank (ECB) meeting on Thursday as major central banks once again take the stage as the global economy battles against a deep depression.
The yen edged up to 107.28 per dollar on Monday.
Against the euro, the yen traded at 116.36, close to its strongest in three years against the common currency.
The pound rose against the dollar and the euro on speculation Britain will ease its lockdown as early as this week as Prime Minister Boris Johnson returns to work after recovering from the illness caused by the coronavirus, the Telegraph reported.
· Treasury yields rise as investors mull reopening of economies
U.S. government debt prices were lower Monday morning as investors assessed the possibility of economies around the world beginning to reopen after prolonged coronavirus shutdowns.
At around 2:15 a.m. ET, the yield on the benchmark 10-year Treasury note was higher at 0.6210% while the yield on the 30-year Treasury bond was up at 1.1947%. Yields move inversely to prices.
A number of U.S. states, including Colorado, Mississippi, Minnesota, Montana and Tennessee, have vowed to ease restrictions this week on commerce brought about by the coronavirus pandemic.
However, experts have warned against reopening economies without systematic diagnostic testing and contact tracing in place.
Meanwhile, White House advisor Kevin Hassett on Sunday told ABC that the historic economic hit from the lockdowns will likely increase the national unemployment rate to 16% or higher this month, necessitating more fiscal stimulus.
· EUR/USD Forecast: Central banks and growth in the spotlight
EUR/USD short-term technical outlook
The EUR/USD pair has settled a few pips below 1.0830, the 61.8% retracement of its latest daily advance. In the daily chart, the 20 DMA maintains its bearish slope, converging with the next Fibonacci resistance at 1.0890. The larger moving averages keep heading south above the shorter one, while technical indicators recovered just modestly, falling short of supporting further gains. In the 4-hour chart, the pair is a couple of pips above its 20 SMA, but below the larger ones, while the Momentum indicator remains directionless below its 100 line. The RSI aims higher around 51, which also falls short of indicating additional advances. The pair would need to recover beyond 1.0900 to reduce chances of a steeper decline, an unlikely scenario at the time being.
Support levels: 1.0790 1.0750 1.0710
Resistance levels: 1.0830 1.0860 1.0900
· USD/JPY short-term technical outlook
The USD/JPY pair offers a bearish stance in its daily chart, as it settled below all of its moving averages, which anyway lack directional strength. Technical indicators, in the meantime, head lower with uneven strength within negative levels. In the shorter-term, and according to the 4-hour chart, the pair is neutral-to-bearish, also developing below moving averages and with technical indicators hovering within neutral levels with modest downward slopes.
Support levels: 107.30 106.95 106.50
Resistance levels: 107.70 108.10 108.50
· BOJ eases policy further, boosts purchases of corporate bond, commercial paper
At its shortened one-day virtual monetary policy meeting, the Bank of Japan (BOJ) board members decided to keep rates unchanged at -10bps while maintaining 10yr JGB yield target at 0.00%.
The BOJ eased policy further, said it will increase the purchases of a corporate bond, and commercial paper. The central bank also pledged to buy an unlimited amount of JGBs, removes pledge to buy JGBs so its holdings increase at an annual pace of around 80 trln yen.
· Fight over next coronavirus aid bill kicks into high gear in U.S. Congress
After passing $3 trillion of coronavirus relief in a rare run of bipartisanship, Republicans and Democrats in the U.S. Congress girded for a new battle over federal assistance to states and local governments grappling with the deadly outbreak.
Spurred on by governors and local officials, Democrats have put out the word they want to provide a sizable rescue package as part of a broader bill - one that could total at least $2 trillion in coming weeks.
Some Republicans have pushed back hard against the idea as unreasonably expensive and unwarranted.
So far, about $730 billion in aid has been made available to small businesses, including approximately $380 billion as part of a broader coronavirus measure President Donald Trump signed into law earlier on Friday.
· Investors are pinning their hopes for the reopening of the U.S. economy on the potential for wider availability of testing for COVID-19 cases and on drug trials for treatments of the deadly disease but said, until there is concrete progress in these areas, further stock market gains may be limited.
“Any sentiment around a therapy is really moving markets because it shapes expectations for a return to normalcy which would be needed to get an economic recovery started,” said Shawn Cruz, manager of trader strategy at TD Ameritrade in Jersey City, New Jersey.
· Profits at China’s industrial firms fell in March although at a slower pace than in the first two months, with many sectors seeing significant declines, suggesting the economy is still struggling to resume production after the coronavirus outbreak.
China’s industrial firms earned 370.66 billion yuan ($52.43 billion) in March, down 34.9% from a year earlier, data from the National Bureau of Statistics showed. This follows a 38.3% slump in January-February, the steepest drop since at least 2010.
For the quarter ended March, industrial firms’ profits fell 36.7% on an annual basis to 781.45 billion yuan.
· Within Asia, the Japanese and Singaporean economies could struggle the most in the coronavirus pandemic, an economist from Moody’s Analytics said on Monday.
Both economies were already weak before the outbreak worsened over the past month — and stricter lockdown measures imposed to contain the virus spread will likely exacerbate their respective economic troubles, said Steve Cochrane, the firm’s chief Asia Pacific economist.
Latest official data in Japan showed the economy shrinking by 6.3% year over year in the three months to December, while preliminary estimates in Singapore indicated that the economy contracted by 2.2% in the quarter that ended in March
· Deutsche Bank warns coronavirus could impact capital target as profit falls from a year ago
Deutsche Bank said it expects to report a fall in net income in the first quarter from a year ago, and will set aside a significant amount for potential loan losses when it reports full earnings Wednesday.
It also warned that it could miss its capital target in the future, as a result of Covid-19.
In a prerelease Sunday, the German bank said it expects to report net income of 66 million euros ($71.56 million) for the first quarter of 2020, compared with 201 million euros in the first quarter of 2019.
Revenues are expected to come in at 6.4 billion euros.
The bank also set aside 500 million euros in provisions for credit losses. It’s a figure that is being closely watched by investors this earnings season as banks prepare for the financial impact of the global coronavirus pandemic.
It will give full details of its results on Wednesday as scheduled.
· Oil prices fell on Monday on signs that worldwide oil storage is filling rapidly, raising concerns that production cuts will not come fast enough to fully offset the collapse in demand from the coronavirus pandemic.
U.S. oil futures led losses, falling by more than $2 a barrel on fears that storage at Cushing, Oklahoma, could reach full capacity soon. U.S. crude inventories rose to 518.6 million barrels in the week to April 17, near an all-time record of 535 million barrels set in 2017.
U.S. West Texas Intermediate CLc1 June futures fell $2.05, or 12.1%, to $14.89 a barrel by 0638 GMT, while Brent crude LCOc1 was down $1.08, or 5.0%, at $20.36 a barrel. The June Brent contract expires this Thursday.
Oil futures marked their third straight week of losses last week - and have fallen for eight of the past nine - with Brent ending down 24% and WTI off around 7%.
· Oil risks further falls as global storage capacity to be filled in 3 to 4 weeks – Goldman Sachs
Analysts at Goldman Sachs, in their latest client note, expressed their outlook on the global oil storage capacity and its implications on oil prices going forward.
Key quotes
"Crude building in storage tanks at record levels.
Global storage capacity to be filled in 3 to 4 weeks.
Once filled, will be nowhere to put any further oil output.
Producers will be forced to shut enough supply to match the demand loss - a cut of around 18 to 20 million barrels a day by mid-May.
Likely to trigger further price volatility - price spikes to the downside until supply equals demand.
Add on the demand bottoming out, likely 4-8 weeks away."
Reference: Reuters, Worldometers, FX Street
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