The Federal Reserve delivered an emergency 100 basis points rate cut over the weekend. The Bank also reduced the reserve requirement ratio to 0%. QE programme amounting to $700 billion was also announced. Fed will not hold a meeting later this week
Investors panicked after Fed’s move. S&P 500 futures are trading limit down (-5%), DAX futures point to over 4% drop at open. S&P/ASX 200 closed 9.7% lower, the biggest one-day drop since June 1992. Nikkei closed 1% lower.
The Bank of Japan moved its policy meeting from Thursday to today. Japanese policymakers double the target for net ETF purchases and introduce a lending program for businesses hit by the epidemic. Elsewhere, RBNZ cut rates by 75 basis points
Number of confirmed coronavirus cases is nearly 170,000. Death toll has risen to over 6,500. Number of deaths in Europe surpassed 2,000. A total of 13 countries reported over 1,000 cases, including 9 European countries.
New York City allows bars and restaurants to conduct only take-out and delivery services. Los Angeles also ordered closure of restaurants, bars and nightclubs. Apple closed all its stores outside China. US CDC recommends postponing any gatherings of over 50 people.
Chinese industrial production dropped 13.5% YoY in January-February period. Retail sales were 20.5% YoY down while investments dropped 24.5% YoY. In each case results were much worse than expected.
The United States is mulling whether to take advantage of low prices and stock up strategic reserves with 77 million barrels of oil.
Japanese yen, British pound and Swiss franc are leaders among G10 currencies while Norwegian krone, Australia dollar and Canadian dollar lead losses. Most of EM currencies decline against USD
Gold, silver and platinum advance. Oil pulls back with Brent testing $32 handle. Industrial metals drop with copper being top laggard.