None of it is working
Erik Bregar of Exchange Bank of Canada - InsideFutures.com - Tue Mar 17, 12:48PM CDT

ANALYSIS

USDCAD

Dollar/CAD is galloping 100pts points higher this morning as global markets continue to panic over a global economic collapse that almost seems inevitable at this point. The market pulled off its highs 1.3990s trend-line resistance on Friday as risk sentiment bounced oddly into the US state of emergency announcement, and while last nights Fed action hit the USD broadly right at the open, risk-off flows are storming back now as traders continue to watch the world effectively shut down. Spain went into full lockdown over the weekend, France appears to be next, and the US CDC has recommended cancelling events with 50+ people for the next 8 weeksall this in an effort to curb the spread of the coronavirus, which has now infected over 166k and killed 6k people worldwide.

The market has now quickly rallied up through the 1.3920s; a level which proved pivotal during the Thursday and Friday sessions last week. The cash S&Ps are expected to plunge 7% and get halted for 15 minutes at the start of trading at 9:30amET today. The SPDR S&P 500 ETF is currently trading down 11% pre-market, which means theres a good chance that the -13% trading curb gets triggered at some point today as well.

USDCAD DAILY

USDCAD DAILY

USDCAD HOURLY

USDCAD HOURLY

APR CRUDE OIL DAILY

APR CRUDE OIL DAILY


EURUSD

Euro/dollar is recouping some of last weeks ECB-driven losses this morning as global markets (and the Fed) go into panic mode again. The EUR continues to benefit whenever we see large bouts of risk-off across global markets and its getting an added boost today from the relative EU vs US monetary policy outlooks, which has just gone alarmingly more dovish in the US. Traders have some resistance to chop through in the 1.1200-1.1250s today however and at the moment they appear to be struggling. The CFTC released its weekly Commitment of Traders report on Friday afternoon and it showed a mass scramble from the leveraged funds to exit short EURUSD positions during the week ending March 10.

EURUSD DAILY

EURUSD DAILY

EURUSD HOURLY

EURUSD HOURLY

APRIL GOLD DAILY

APRIL GOLD DAILY


GBPUSD

Sterling absolutely crashed towards the end of last week. We think traders were right to jump the gun on the US to ban UK flights trade last Thursday because the ban is now in effect. We think a sell everything UK trade emerged on Friday as well after UK science advisor, Sir Patrick Vallance, said that one of the key things we need to do is to build up some kind of herd immunity so more people are immune to this disease and we reduce the transmission.UK secretary of state for health and social care, Matt Hancock, tried to dial this back on Sunday by stressing that herd immunity to Covid-19 is not a stated policy, but the damage was already done in the markets.

GBPUSD is now trading a whopping 700pts lower since President Trump announced the travel ban in Europe last Wednesday night. The market saw a small bounce at the Sunday open last night, after the Feds emergency rate cut/QE action was announced, but it continues to struggle as broad risk-off flows grow stronger into NY trade today. Andrew Bailey, the Bank of Englands new governor, said this morning that the public can be assured of prompt action again when we need to take it. We think traders will be laser focused today on the markets ability to hold the 1.2240-50 trend-line extension support level. The UK now has 1,372 confirmed coronavirus cases and 35 deaths.

GBPUSD DAILY

GBPUSD DAILY

GBPUSD HOURLY

GBPUSD HOURLY

EURGBP DAILY

EURGBP DAILY


AUDUSD

The Australian dollar also saw a quick bounce at the start of Sunday trade last night after the Fed cut interest rates by 100 basis points and announced $700bln in new asset purchases. However, it appears quantitative easing may be coming down-under as well following last nights announcement that the Reserve Bank of Australia is ready to buy government bonds (details expected to be released on Thursday), and with that AUDUSD is trading lower once again. The RBA injected a further 5.9blnAUD into local repo markets today and this comes after flooding the market with 8.8bln AUD on Friday. The OIS market is now pricing in an implied overnight target rate of 0.11% in Australia, versus the current rate of 0.50%. The Reserve Bank of New Zealand cut interest rates last night by 75bp and signaled it was now ready for quantitative easing as well.

AUDUSD DAILY

AUDUSD HOURLY

AUDUSD HOURLY

USDCNH DAILY

USDCNH DAILY


USDJPY

The Japanese yen is one of few places to hide in currency markets today as global risk-off sentiment reaches a fever pitch once again. Fridays surge to the 108.50 level seemed rather unjustified in light of President Trumps declaration of a national emergency, but this move has largely retraced now with USDJPY falling 2.3% back to the mid 105s. A lot of people are criticizing the Bank of Japans emergency action today, to double the amount of stock ETFs that it currently buys, as not enough. The US stock market is the focus at this hour for broader risk sentiment. Can President Trump save it again today? Todays White House coronavirus press briefing has been moved to 3:30pmET.

USDJPY DAILY

USDJPY DAILY

USDJPY HOURLY

USDJPY HOURLY

US 10YR BOND YIELD DAILY

US 10YR BOND YIELD DAILY

Charts: Reuters Eikon

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