Here is what you need to know on Wednesday, February 26:
Markets are trying to find their feet after the second consecutive day of 3%+ drops in US shares. US ten-year bond yields fell to record lows, weighing on the US dollar. EUR/USD is near 1.09, GBP/USD temporarily topped 1.30, and USD/JPY dipped below 110 before stabilizing. Gold prices remain elevated at around $1,650.
The latest trigger has been a spread of the coronavirus disease to additional countries in Europe including Germany, Switzerland, Austria, Croatia, and mainland Spain. The first infection was also reported in Brazil. The number of cases in South Korea has surpassed 1,100 while only China – the epicenter of the outbreak – has announced a deceleration in the number of deaths.
The World Health Organization has expressed concern about the spread of the respiratory disease but has refrained from declaring a global pandemic. Concerns are growing about the spread of the disease in the US after a warning from the Center for Disease Control (CDC).
Brexit: The EU published its mandate for talks about future relations with the UK which are set to begin on Monday. Brussels demands a level-playing field that London opposes.
US data: The Conference Board's Consumer Confidence gauge for February missed expectations with 130.7, yet still at high levels. New Home Sales for January are set to show an increase.
Fed: Neel Kashkari, President of the Minnesota branch of the Federal Reserve, speaks today. His colleagues at the central bank have expressed concern about coronavirus but have refrained from suggesting cutting rates. Markets are pricing three cuts by January 20201.
WTI Crude Oil is clinging to $50 after a sharp decline. Weekly oil inventory figures are eyed later in the day.
Cryptocurrencies have dropped with Bitcoin trading around $9,200 and Ethereum around $240.
See Dollar domination set to continue, with or without coronavirus fears
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.