Here is what you need to know on Tuesday, March 17:
Stocks are in the green early on Saint Patrick's Day, after yet another massive sell-off on Monday. Concerns about the impact of coronavirus weighed heavily on the markets, triggering double-digit falls on Wall Street in the worst fall since 1987. The Federal Reserve's massive accommodation – slashing rates to zero, launching $700 billion of QE, and other measures – failed to cheers investors. Airlines are lining up for bailouts as countries are closing borders and forcing isolation, industrial companies are shutting down plants, while other firms say they cannot provide outlooks.
On Tuesday, S&P futures are up, and the dollar is in demand across the board, advancing against all currencies, including the yen. Gold is also suffering from the general sell-off, trading below $1,500.
President Donald Trump changed his tone, sounding somber, not ruling out a recession, and saying the disease could peak only in the summer. The administration recommended refraining from gatherings of over ten people. Democrats have proposed a $750 billion stimulus bill, similar in scale to the then-President Barrak Obama's package following the financial crisis.
In Europe, France and Germany have imposed severe restrictions, with French President Emmanuel Macron said "we are at war" and also pledged €300 billion to support companies in distress, as well as waiving utility bills. Other countries may follow. The Euro 2020 football tournament may be canceled.
The German ZEW Economic Sentiment for March may shed light on business confidence after the intensification of the crisis, and it is forecast to crash as EUR/USD trades below 1.12.
See German ZEW Preview: Three reasons why low expectations are too optimistic, lose-lose for EUR/USD
In the UK, the government seemingly made a U-turn on its strategy to let the virus spread among the strong – causing "herd-immunity" – and recommended refraining from large gatherings as the government mulls a financial package. Prime Minister Boris Johnson said it is critical to act at the right moment. Britain's job report is set to provided insights on how the economy performed before the crisis.
See UK jobs preview: Jobless claims may provide signs of the coronavirus impact, shape pound-positioning
Later in the day, US Retail Sales figures for February are projected to edge higher. The data – normally a top-mover – will likely be shrugged off as old news. The Empire State Manufacturing Index for March plunged in the report on Monday.
See US Retail Sales February Preview: Old news or a forecast?
Oil is edging higher with WTI nearing $30 after Monday's crude crash. The US is filling up strategic reserves while the Suadi-Russian price war is weighing on price values.
New Zealand introduced a stimulus plan worth 4% of Gross Domestic Product, larger than the one in the 2008 crisis.
Cryptocurrencies are attempting a recovery after another downfall, with Bitcoin trading above $5,000 and Ripple battling $0.15.
Centrist Joe Biden and left-leaning Bernie Sanders compete in another set of primaries for the chance to challenge President Donald Trump in November's Presidential elections. Biden is in the lead, in a contest now overshadowed by Covid-19.
More: Trading Volatility: Resist the temptation to pick tops and bottoms
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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.
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