· The dollar rose against the yen on Monday as moves by the United States and other countries to re-open their economies raised hopes for a quicker global recovery from a deep recession triggered by the coronavirus health crisis.
The dollar rose 0.28% to 106.95 yen on Monday, and was steady at $1.0843 against the euro.
The Australian dollar, which is often traded as a proxy for risk because of its close ties to China’s economy and global commodities, recovered from an early fall and rose to$0.6546.
California, Michigan, and Ohio, three important states for U.S. manufacturing, are taking steps to allow factories and some businesses to resume work in a boost to sentiment.
Sterling was little changed against the dollar and the euro after British Prime Minister Boris Johnson outlined plans to slowly ease coronavirus lockdown restrictions.
The pound was little changed at $1.2419 on Monday. Against the euro, sterling held steady at 87.32 pence.
· EUR/USD Forecast: Pressured within range
The EUR/USD pair is neutral-to-bearish as the daily chart shows that sellers rejected an attempt to advance around a mild-bearish 20 DMA. The larger moving averages maintain their bearish slopes above the shorter ones, while technical indicators lack directional strength within negative levels. In the shorter-term and according to the 4-hour chart, the technical picture is quite alike, as the pair is developing within directionless moving averages, while technical indicators hover around their midlines without directional strength.
Support levels: 1.0790 1.0755 1.0710
Resistance levels: 1.0865 1.0900 1.0940
CORONAVIRUS CRISIS:
Ø Total confirmed cases: More than 4,181,307
Ø Total deaths: At least 283,880
Ø The coronavirus COVID-19 is affecting 212 countries and territories around the world and 2 international conveyances: the Diamond Princess cruise ship harbored in Yokohama, Japan, and the Holland America's MS Zaandam cruise ship.
Ø US cases: At least 1,367,638 and deaths: 80,787
Ø Thailand cases: At least 3,015 (+6) and deaths: 56
· Fed is unlikely to consider negative interest rates – WSJ
The Wall Street Journal (WSJ) carried an opinion piece over the weekend, citing that the US Federal Reserve officials are unlikely to consider using negative interest rates.
Additional quotes
“Concluding the tool's clear costs outweigh its uncertain benefits.
Fed leaders see negative rates as a very last resort-and a remote one, still-worrying they would have harmful effects on financial markets and the banking industry
there is little political support for the policy in the US.”
· Japan could lift a state-of-emergency in many regions this week if new coronavirus cases are under control, the economy minister said on Monday, as it inches towards a gradual return of economic activity.
· China’s central bank said it lowered interest rates on its standing lending facility (SLF) in April, catching up with similar reductions in other liquidity tools as part of Beijing’s efforts to support the coronavirus-hit economy.
In the first-quarter monetary policy report published on Sunday, the People’s Bank of China (PBOC) said it had cut SLF rates by 30 basis points on April 10, bringing borrowing costs on overnight, seven-day and one-month loans to 3.05%, 3.2%, 3.55%, respectively.
· South Korea reported 35 new cases, an apparent rebound as the country eases restrictions. The daily number of cases had dropped to single digits or zero in recent weeks.
However, the country reported a new, growing outbreak linked to a number of night clubs. The government shut down all such clubs and bars in Seoul and warned of a second wave of infections.
· US to accuse China of trying to hack vaccine data, as virus redirects cyberattacks – NY Times
The NY Times reports about a draft of the forthcoming public warning, which the US officials are likely to issue in the days to come.
According to the US daily, “the F.B.I. and the Department of Homeland Security is preparing to issue a warning that China’s most skilled hackers and spies are working to steal American research in the crash effort to develop vaccines and treatments for the coronavirus.”
· China could find itself having to write off massive loans as countries that owe Beijing money under its massive infrastructure project struggle with mounting debts in the coronavirus fallout, analysts say.
China’s mammoth infrastructure investment plan — also known as the Belt and Road Initiative (BRI) — is highly controversial and widely criticized for saddling many countries with debt.
· China’s purchases of US goods will fall way short of ‘phase one’ trade deal due to the coronavirus, says think tank
The coronavirus pandemic will cause China’s purchases of U.S. goods this year to fall way short of what was agreed to in the “phase one” trade deal, according to a forecast by think tank Center for Strategic and International Studies.
The American think tank projected that exports of U.S. goods to China could come in at only $60 billion for all of 2020 — much lower than the $186.6 billion needed to meet requirements in the agreement that both countries signed in January.
That forecast was “admittedly” a “worst-case scenario” because Chinese purchases of U.S. goods could rise later in the year as the economy recovers, but any increases still “will not change the overall picture, just the details,” Scott Kennedy, senior advisor and trustee chair in Chinese business and economics at CSIS, wrote in a Friday report.
CSIS’ Kennedy outlined in the report three options that the Trump administration can take to address China’s “poor performance” in fulfilling the trade deal:
1. Go through a multistage resolution process as outlined in the deal, which involves renegotiating targets and, failing which, applying “remedial” measures such as additional tariffs;
2. Slap penalties on China and possibly even withdrawing from the deal entirely;
3. Recognize that the pandemic has hampered China’s ability to buy more U.S. goods and that Chinese imports will rise as its economy restarts.
Each of those options has its own advantages and disadvantages, wrote Kennedy. The first two options could prompt protest and retaliation from China, while the third is “the most politically risky approach” for Trump, he added.
“There is a fourth option, but it is not one the administration will choose: Admit that the purchases component of the deal was a mistake to begin with and reconsider their entire approach to China,” he said.
· Hong Kong authorities arrested more than 200 people during pro-democracy protests, media reported on Monday, after a sing-along demonstration at a shopping mall spilled out on to the streets of the Chinese-ruled city.
Hundreds of riot police were deployed to disperse the protesters on Sunday, with some members of the media caught up in the chaos that evoked memories of the sometimes violent unrest that rocked the global financial hub last year.
· New Zealand businesses including malls, cinemas, cafes and gyms will reopen on Thursday after some of the tightest restrictions in the world to stop the spread of the coronavirus were further loosened on Monday.
· 80 million Chinese may already be out of work. 9 million more will soon be competing for jobs, too
Beijing's data, after all, does not include people in rural communities or a large number of the 290 million migrant workers who work in construction, manufacturing and other low paying but vital activities.
If those migrants are included, as many as 80 million people could have been out of work at the end of March, according to an article co-authored last month by Zhang Bin, an economist at the Chinese Academy of Social Sciences, a think tank run by the government.
Other experts say that the 80 million figure is likely much closer to reality. It's also a lot more disturbing — it would mean that nearly 10% of people in China who are supposed to be employed are actually out of work, according to economists at Société Générale.
"The Covid-19 shock to the job market is unprecedented in its scale, length and nature," wrote Wei Yao and Michelle Lam in a research report last week.
Economic growth was already the weakest in decades before the outbreak pushed the country into its first contraction since 1976, when Communist Party leader Mao Zedong's death ended a decade of social and economic tumult.
The landscape might get even more difficult in the coming weeks. Beijing expects about 8.7 million people will graduate from colleges and universities this year, creating even more competition for work.
· Oil prices fell on Monday as concern over a persistent glut and economic gloom caused by the coronavirus pandemic combined to cancel out support from supply cuts at some of the world’s top producers.
Brent crude futures LCOc1 were down 29 cents, or 0.9%, at $30.68 a barrel by 0431 GMT, while U.S. West Texas Intermediate crude futures CLc1 fell 17 cents, or 0.7%, to $24.57 a barrel.
· Oil Price Forecast: WTI slips below $24.00, stays inside short-term triangle
While stepping back from the two-day-old falling trend line, WTI June Futures on NYMEX drop to $23.92, down near 3.30% on a day, during Monday’s Asian session.
The black gold currently declines towards a 100-HMA level of $23.82 ahead of visiting the triangle’s support line around $23.20.
It should, however, be noted that the oil benchmark’s drop beneath $23.20 will make it vulnerable to slide towards $2050/30 support confluence including the early-May tops and 200-HMA.
During the quote’s fresh move up, the triangle’s resistance line near $24.65/70 can challenge buyers before pushing them towards Wednesday’s top near $26.00.
If at all the bulls manage to successfully cross $26.00, expectations of refreshing monthly high surrounding $26.70 can’t be ruled out.
· U.S. stock futures rose on Monday morning after Wall Street posted consecutive rallies to end last week amid the prospects of the global economy reopening soon.
Dow Jones Industrial Average futures traded 88 points higher, implying a Monday opening gain of about 134 points. S&P 500 and Nasdaq 100 futures also pointed to a positive open for the two indexes on Monday.
Reference: Reuters, Worldometers, FX Street, CNBC,CNN
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