We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Mixed
USD/JPY
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • What's the difference between leading and lagging indicators? Find out from @RichardSnowFX here:https://t.co/vGx8HCagF5 https://t.co/j8PEFYbEqr
  • The $USD fell as an improvement in sentiment slowed aggressive capital outflows from emerging markets and #ASEAN economies. What do USD/SGD, USD/MYR, USD/IDR and USD/PHP face next? Find out from @ddubrovskyFX here: https://t.co/3SQYf5Y0Vx https://t.co/lodbsqO94L
  • The $USD may return to the offensive as markets flee to cash amid fears of deep global recession thanks to the still-raging #coronavirus outbreak. Get your US Dollar update from @IlyaSpivak here: https://t.co/g1us4ZbYR5 https://t.co/detT6m6ZKo
  • The #Dow Jones, S&P 500 and #DAX 30 have bounced after aggressive declines. Can this momentum last? Trader positioning seems to be offering mixed signals as technicals point bearish. Get your market update from @ddubrovskyFX here:https://t.co/DdCUyoGSmL https://t.co/NQtbwy5Brg
  • Reports that London-based fund managers have discussed long market closures with the Bank of England are unlikely to bear fruit, but that they happened at all may boost already-crowded haven trades. Get your EUR/CHF market update from @DavidCottleFX here:https://t.co/mernf5MDH3 https://t.co/1rzQT6ClCY
  • $AUD chart positioning suggests prices have set a swing top near the 0.62 figure. Re-engaging the long-term downtrend against $USD may follow. Get your AUD/USD market update from @IlyaSpivak here:https://t.co/OIEDlId6HZ https://t.co/CzqJf3wsgh
  • The $USD could be on the verge of regaining upside momentum against ASEAN FX such as the Singapore Dollar, Indonesian Rupiah and Malaysian Ringgit. Will the Philippine Peso follow? Find out from @ddubrovskyFX here:https://t.co/cBzPejcNHu https://t.co/4fcImOiSzD
  • $NZD chart positioning suggests the downtrend against its US namesake may be resuming but trader sentiment studies flash warning sign for sellers.Get your NZD/USD market update from @IlyaSpivak here:https://t.co/NUHD43A8C9 https://t.co/K7l3Ju0GP0
  • The Federal Reserve has made a powerful statement about its commitment to shoring up offshore $USD funding markets through the #coronavirus spread. Get your market update from @DavidCottleFX here:https://t.co/fLZjxjr4L9 https://t.co/UdRor0d92U
  • The #Euro has dropped through support guiding it higher from late-March lows, suggesting that the end of a corrective rebound has given way to downtrend resumption. Get your $EURUSD market update from @IlyaSpivak here: https://t.co/gpKowYNmGi https://t.co/CY7RuZf91s
Asian Stock Prices Wilt Again As Coronavirus Routs Wall St.

Asian Stock Prices Wilt Again As Coronavirus Routs Wall St.

2020-02-28 03:03:00
David Cottle, Analyst
Share:

Asia Pacific Stocks, Currency Reaction to US Selloff, Talking Points:

  • Asian equity indexes were broadly and heavily lower
  • That coronavirus has potential to deliver a major economic hit is no longer in doubt
  • Currency reaction is a little more nuanced and seems to depend on countries’ scope to cut rates.

Asia Pacific stock markets only had one way to go Friday in the wake of the Dow Jones Industrial Average’s record one-day drop in the previous US session, as fears of a potentially massive economic hit from the spread of coronavirus send forecasters back to the drawing board to rethink their 2020 calls.

US President Donald Trump appeared before the press late Wednesday in the US, with a bevy of medical experts, to outline the administration’s response to the outbreak. However, this seems signally to have failed in reassuring investors, and the always-suspect prognosis that the US economy might remain largely immune to the contagion’s effects has now been comprehensively abandoned.

Markets now weigh the chances of a broad global recession triggered by the outbreak. Credit rating agency Moody’s was reportedly the latest heavyweight house to give its view, reportedly labelling such a slowdown as likely should the disease reach pandemic status worldwide.

Stock markets look set for their worst week since the days of the financial crisis in 2008, and it’s very difficult to see a lasting bounce for investor risk appetite for as long as the coronavirus story dominates headlines.

With all of the above in mind, it’s no surprise that growth-correlated assets from stock markets through energy to currencies took a hit in Asia. Many of them had already of course been hammered by virus-related worries given their proximity to China, their trading links with it, or both.

The ASX 200 is now back down to lows not seen since August 2019 having endured eight straight days of precipitous falls and a loss of 750 points.

ASX 200 Index, Daily Chart

The index is replete with China linked plays given Australia’s huge raw material exports to the world’s number two economy, but similar falls can be seen across the region from Japan to North Korea.

Currency markets have reacted a little differently as the markets move to expect deeper interest rate cuts from the US Federal Reserve in response to the crisis. With three quarter-percentage-point reductions now almost priced-in to US futures curves, the Dollar is faring notably less well against currencies whose own base rates are judged able to go no lower. The Euro and the Japanese Yen figure here, the contention being that interest rate differentials can effectively only move in their favour as US borrowing costs fall.

The likes of the Australian and New Zealand Dollars, meanwhile, have done rather worse as their own rates do clearly have room to go lower, albeit from record lows. This in turn offers the prospect that those differentials can be maintained, stabilizing relative value.

It’s important to remember, however, that both currencies have already been crushed this year by the virus-related reduction in risk appetite, with the Australian Dollar close to eleven-year lows against the greenback.

Australian Dollar Vs US Dollar, Daily Chart

It may be the case that markets got well ahead of themselves toward the end of 2019 and had risen too sharply on things like the inking of a phase one trade deal between China and the US, and the breaking of Britain’s electoral Brexit deadlock.

It’s possible that a risk rethink would have set in by now in any case, but the viral outbreak has forced a much deeper and possibly much more lasting one on investors. It’s highly unlikely that countercyclical assets such as gold, bonds, the Swiss Franc and the Japanese Yen are going to lose their appeal anytime soon.

How to Use IG Client Sentiment in Your Trading
How to Use IG Client Sentiment in Your Trading
Recommended by David Cottle
Improve your trading with IG Client Sentiment Data
Get My Guide

Asia Pacific Stocks, Australian Dollar, New Zealand Dollar Resources for Traders

Whether you’re new to trading or an old hand DailyFX has plenty of resources to help you. There’s our trading sentiment indicator which shows you live how IG clients are positioned right now. We also hold educational and analytical webinars and offer trading guides, with one specifically aimed at those new to foreign exchange markets. There’s also a Bitcoin guide. Be sure to make the most of them all. They were written by our seasoned trading experts and they’re all free.

--- Written by David Cottle, DailyFX Research

Follow David on Twitter@DavidCottleFX or use the Comments section below to get in touch!

https://www.dailyfx.com/free_guide-tg.html?ref-author=Cottle.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.