Asian stocks finished lower for one more session as investors are selling everything in panic mood in an attempt to cover in safe-haven cash. Bonds, stocks, commodities and gold sold off aggressively across the globe. Investors liquidating portfolios and raise US dollars as the monetary and fiscal stimulus failed to calm markets. Now there are over 218,000 confirmed cases and 9000 deaths, as in Italy, Spain and France the cases accelerates as countries closing the borders. The European Central Bank (ECB) launched an emergency €750bn relief package to offset the impact of the coronavirus pandemic. ECB said that would do everything in its powers to support the euro in these extraordinary times. Central banks from the U.S., UK, Japan, eurozone, Canada and Switzerland took coordinated action to improve USD liquidity by lowering the price and extending the maximum term of US dollar lending operations.
Nikkei 225 closed down 1.04% at 16552. The Singapore Straits times finished 3.92% lower at 2330. The Hang Seng Index is 1.70% lower at 21915, and the Shanghai Composite ended 0.98% lower at 2702. Aussie shares slumped by 3.40% at 4782.
In our forex calendar, we have the construction output from the eurozone. In the U.S., we have the Philadelphia Fed Manufacturing Index, Philadelphia Fed Employment and Initial Jobless Claims due at 12:30GMT. The CB Leading Economic Index will be released at 14:00. EIA Natural Gas Storage Change is due at 14:30GMT. Canadian ADP Nonfarm Employment Change will be out at 12:30GMT.
AUDUSD slumps to 2003 lows amid USD strength across the board. Investors turn to US Dollar amid the USD funding crunch as stocks sell-off intensifies. Reserve Bank of Australia (RBA) cut the cash rate by 25 basis points to record low 0.25%. RBA said it would not raise rates until it approached ‘full employment’ level. Other measures to support the financial system were also announced. This includes buying government bonds and a funding facility to provide credit for small & medium-sized businesses. The employment report beat expectations. The Employment rose by 26,700 in February above the consensus of 6,700; the unemployment rate fell to 5.1% from 5.3%.
On the technical side, the AUDUSD outlook is bearish, and lower levels can’t be ruled out.
Initial support for the AUDUSD will be met at 0.5504 the daily low, while a move below might test the 0.5450 psychological mark. On the other side, first resistance for the AUDUSD stands at 0.5816 the daily top. Next resistance level stands at 0.6018 the high from yesterday’s session. The next supply zone for AUDUSD would be reached at 0.6143 the high from March 17.