U.S. Markets Update On February 19th, 2020

U.S. Markets Update On February 19th, 2020

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Dollar climbs as weak German data dents Euro, Wall street falls, Gold hits 1-month peak, Oil falls nearly 1% on virus impact - February 19th, 2020.

Market Roundup

• Euro falls to near 3-year low, slips below key $1.08 level
• US Feb NY Empire State Manufacturing Index  12.90, 5.00 forecast, 4.80 previous
• Canada Dec Manufacturing Sales (MoM)  -0.7% , 0.5% forecast, -1.0% previous
• US Feb NAHB Housing Market Index  74, 75 forecast, 75 previous
• New Zealand GlobalDairyTrade Price Index -2.9%,-4.7%  previous

Looking Ahead - Economic Data (GMT) 

• 23:30 Australia  MI Leading Index (MoM) 0.1% previous
• 23:50 Japan Dec Core Machinery Orders (MoM)  -9.0% forecast,18.0% previous
• 23:50 Japan Dec Core Machinery Orders (YoY)  -1.3% forecast,5.3% previous
• 23:50 Japan Jan Exports (YoY) -6.9% forecast,-6.3% previous
• 23:50 Japan Jan Imports (YoY) -1.3% forecast, -4.9% previous
• 23:50 Japan Jan Trade Balance -1,694.9B,    -154.6B  previous
• 00:30 Australia Wage Price Index (YoY) (Q4) 2.2% forecast,2.2% previous
• 00:30 Australia Wage Price Index (QoQ) (Q4) 0.5% forecast,0.5% previous

Looking Ahead - Economic events and other releases (GMT)

•13:30 US FOMC Member Bostic Speech
• 13:30 US FOMC Member Mester Speech
• 16:45 US FOMC Member Kashkari Speech
• 18:30 US FOMC Member Kaplan Speech
• 19:30 US FOMC Meeting Minutes
• 21:00 US FOMC Member Barkin Speech

Currency Summaries

EUR/USD: The euro declined against dollar on Tuesday, after a German survey showed a slump in investor confidence. Germany’s ZEW research institute said in its monthly survey that investors’ mood deteriorated far more than expected in February, on worries the coronavirus would dampen world trade. The survey added to expectations the German economy will lose more momentum in the first half as slumping exports keep manufacturers mired in a recession. The euro was last trading down 0.1% at $1.0792 . Immediate resistance can be seen at 1.0838 (5 DMA), an upside break can trigger rise towards 1.0877 (9 DMA).On the downside, immediate support is seen at 1.0784 (Lower BB), a break below could take the pair towards 1.0700 (Psychological level).

GBP/USD: Sterling edged higher against the dollar on Tuesday, after Britain’s new finance minister said he would deliver the budget as planned in three weeks. The pound, earlier declined slightly against both the dollar and the euro on conflicting views put forth by Britain and the European Union about their trade negotiations, gradually rebounded after Sunak’s tweet. Sterling rose 0.2 percent to hit the day's high of $1.3040, before settling around $1.3000.Immediate resistance can be seen at 1.3052  (50 DMA), an upside break can trigger rise towards 1.3100 (Psychological level).On the downside, immediate support is seen at 1.2970 (9 DMA), a break below could take the pair towards 1.2931 (100 DMA).

USD/CAD: The Canadian dollar weakened to a near one-week low against its U.S. counterpart on Tuesday as economic damage from the coronavirus weighed on investor sentiment and domestic data showed a surprise decline in manufacturing sales. Canadian factory sales decreased by 0.7% in December from November, the fourth consecutive monthly decline, on lower sales in motor vehicle assembly, as well as aerospace products and parts, Statistics Canada said. Economists had expected a 0.5% increase. At (1429 GMT), the Canadian dollar was trading 0.1% lower at 1.3258 to the greenback. Immediate resistance can be seen at 1.3268 (9 DMA), an upside break can trigger rise towards 1.3300 (Psychological level).On the downside, immediate support is seen at 1.3235 (21 DMA), a break below could take the pair towards 1.3185 (30 DMA).

USD/JPY: The dollar edged lower against the Japanese yen on Tuesday, as increasing financial fallout of the virus outbreak in China increased demand for Japanese yen.  With death toll climbing to nearly 1,900 in China, disruptions and delays in operations in the mainland owing to the epidemic and its impact remained a concern for businesses. Global financial markets felt the sting as investors took a more cautious stance in trade. Strong resistance can be seen at 110.14 (12th Feb high), an upside break can trigger rise towards 110.46 (Higher BB).On the downside, immediate support is seen at 109.62 (30 DMA), a break below could take the pair towards 109.00 (Psychological level).

Equities Recap

  • European shares declined on Tuesday,as two of the world's mega companies, and Europe's largest economy,Germany, reported damage from the coronavirus outbreak.
  • UK's benchmark FTSE 100 closed down by 0.69 percent , Germany's Dax ended up by 0.75 percent, France’s CAC finished the day up by 0.48 percent.
  • U.S. stocks dropped on Tuesday after a surprise sales warning from technology bellwether Apple fanned worries about the impact of the coronavirus outbreak on global supply chains.
  • Dow Jones closed down by 0.56 percent, S&P 500 ended down by 0.29percent, Nasdaq finished the down up by 0.02 percent.

Treasuries Recap

  • U.S. Treasury yields fell on Tuesday after Apple Inc warned that it would miss sale guidance due to manufacturing slowdowns caused by the coronavirus, denting risk appetite and increasing demand for safe-haven bonds.
  • Benchmark 10-year note yields fell three basis points to 1.56%.

Commodities Recap

  • Gold prices jumped 1% to a more than one-month high on Tuesday as a surprise sales warning from Apple Inc highlighted the impact of the coronavirus outbreak on global economy and drove investors to seek lower-risk assets.
  • Spot gold  was up 1% at $1,595.97 per ounce by 10:32 a.m. EST (1532 GMT), its highest since Jan. 8.U.S. gold futures climbed 0.8% to $1,599.20 an ounce.
  •  Oil prices fell almost 1% on Tuesday, pressured by concerns over the impact on crude demand from the coronavirus outbreak in China and a lack of further action by OPEC and its allies to support the market.
  • Brent crude was down 44 cents, or 0.8%, to $57.23 a barrel by 11:00 a.m. EST (1600 GMT). U.S. West Texas Intermediate (WTI) crude futures fell 39 cents, or 0.8%, to $51.66 a barrel.

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