Action Insight Mid-Day Report 2-27-20

Euro Surges as Markets Reprice Coronavirus Impacts, Risk Aversion Continues

Action Insight Mid-Day Report 2-27-20 Euro Surges as Markets Reprice Coronavirus Impacts, Risk Aversion Continues Global stock market crash on fear of Wuhan coronavirus pandemic continues today, while treasury yields are pressured too. Euro and Swiss Franc are currently the strongest ones. There are a couple of explanations, like safe haven flows out of US, due to free fall in stocks, as well as record low treasury yields. But we believe it's more about repricing of impact on the economy. Euro took the lead down weeks ago, as the Eurozone economy, in particular export-led Germany, would be hit harder than US if the coronavirus outbreak is contained within China. But now, when every countries in dragged into it, traders are reversing the overstretched Euro bearishness. Staying in the currency markets, Canadian Dollar is currently the weakest one, as oil's free fall accelerates too. WTI is currently at 46.8, well on track to retest 42.05 low. Sterling is the second weakest after UK's Brexit negotiation mandate showed it threatens to walk out from talks as soon as in June. Dollar is soft too, but weakness is not apparent, except against Euro and Swiss. The greenback's resilience is somewhat reflected in range trading in gold too. In US, DOW future is currently down -390 pts. 10-year yield is at new 1.275 after hitting new record low. In Europe, FTSE is down -2.88%. DAX is down -2.97%. CAC is down -3.07%. German 10-year yield is down -0.042 at -0.544. earlier in Asia, Nikkei dropped -2.13%. Hong Kong HSI rose 0.31%. China Shanghai SSE rose 0.11%. Singapore Strait Times dropped -0.19%. Japan 10-year JGB yield dropped -0.0094 to -0.103. Full Report Here US durable goods orders dropped -0.2%, ex-transport orders rose 0.9% US initial jobless claims rose 8k to 219k ECB Schnabel: We are very worried about spread of coronavirus UK threatens to move our from negotiation with EU by June Eurozone economic sentiment rose to 103.5, on stronger consumers and industry... PBoC pledges ample liquidity and targeted support One coronavirus infected Korean flight attendant traveled US route Bank of Korean stands pat, micro support for businesses more effective... BoJ Kataoka: Coronavirus outbreak may weaken consumption and capital expenditure Australia private capital expenditure dropped -2.8% in Q4 New Zealand exports to China surged in January, coronavirus impact to... New Zealand ANZ business confidence plunged to -19.4, coronavirus taking a... Coronavirus cases in South Korea and Italy continue to surge Top Movers | HeatMap | Pivot Points | Pivot Meters | Action Bias | Vol Losing Safe-Haven Status, Japanese Yen Weakens Despite Rising Global Uncertainty Sudden Explosion of Coronavirus Cases in Korea might Urge BOK to... Safe Haven Flows into Gold and Treasuries on China Coronavirus Contagion Central Bank Views | China Watch | Oil N' Gold | Special Topics EUR/USD Mid-Day Outlook Daily Pivots: (S1) 1.0853; (P) 1.0881; (R1) 1.0907; More... EUR/USD's rebound from 1.0777 extends further to as high as 1.0978 today. The strength suggests that it's corrective whole fall from 1.1239 to 1.0777. Intraday bias remains on the upside for 61.8% retracement of 1.1239 to 1.0777 at 1.1063 next. We'd expect strong resistance from there to limit upside. Below 1.0890 minor support will turn bias to the downside for retesting 1.0777 low. However, sustained break of 1.1063 will raise the chance of larger reversal and target 1.1239 key resistance. Full Report Here EURUSD | USDJPY | GBPUSD | USDCHF | AUDUSD | USDCAD EURJPY | EURGBP | EURCHF | EURAUD | GBPJPY Recommended Readings EUR/USD Sets Its Sights On 1.0970 Resistance US Open – Virus Fears Intensifies, Johnson Plays Hardball, Oil's Demand Shock, Gold Rises NZDUSD Rebounds On 4-Month Low, Bullish Correction In Very Short Term US 30 Stock Index Dives Below Ascending Channel Dollar Retreats, Stocks In Freefall As Virus Engulfs Markets EUR/USD Outlook: Fresh Recovery Acceleration Is Pressuring Key Barrier At 1.0954 EURCAD Accelerates To 3-Week High, Bias Cautiously Positive US 500 Index Plunges To 4-Month Low, Biggest Fall Since December 2018 Equity Rout Deepens, Energy Companies On The Chopping Block As WTI Slips Below $48 Pb Fundamental Analysis | Technical Analysis In-depth Reports Losing Safe-Haven Status, Japanese Yen Weakens Despite Rising Global Uncertainty The Implications of the Phase One Trade Deal for the U.S., China and the Globe Will COVID-19 Force the Fed's Hand? Japan – Feeling Blue Economic Calendar GMT Ccy Events Actual Forecast Previous Revised 21:45 NZD Trade Balance (NZD) Jan -340M -530M 547M 384M 00:00 NZD ANZ Business Confidence Jan -19.4 -13.2 00:30 AUD Private Capital Expenditure Q4 -2.80% 0.50% -0.20% -0.40% 09:00 EUR Eurozone M3 Money Supply Y/Y Jan 5.20% 5.50% 5.00% 4.90% 09:00 EUR Private Loans Y/Y Jan 3.70% 3.70% 3.70% 10:00 EUR Eurozone Business Climate Feb -0.04 -0.24 -0.23 10:00 EUR Eurozone Economic Sentiment Feb 103.5 101.5 102.8 102.6 10:00 EUR Eurozone Industrial Confidence Feb -6.1 -7.8 -7.3 -7 10:00 EUR Eurozone Services Sentiment Feb 11.2 10.8 11 10:00 EUR Eurozone Consumer Confidence Feb F -6.6 -6.6 -6.6 -8.1 13:30 CAD Current Account (CAD) Q4 -8.8B -9.00B -9.86B -10.9B 13:30 USD Initial Jobless Claims (Feb 21) 219K 211K 210K 211K 13:30 USD GDP Annualized Q4 P 2.10% 2.10% 2.10% 13:30 USD GDP Price Index Q4 P 1.30% 1.40% 1.40% 13:30 USD Durable Goods Orders Jan -0.20% -1.50% 2.40% 2.90% 13:30 USD Durable Goods Orders ex Transportation Jan 0.90% 0.20% -0.10% 0.10% 15:00 USD Pending Home Sales M/M Jan 2.00% -4.90% 15:30 USD Natural Gas Storage -158B -151B

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