Fiscal Policy

Risky Assets Sell-Off Accelerates Amid Growing Coronavirus Fears

Risky assets and Asian stocks are sharply lower today amid concerns that the coronavirus outbreak is here to stay. A rising number in confirmed cases in Italy send equities indices close to two-month lows. Italy has confirmed 195 coronavirus cases until Monday morning, with at least four deaths in Europe’s third-largest economy.

The Singapore FTSE Straits Times closed down 1.22% at 3142. The Shanghai Composite index closed 0.28% lower at 3031. The ASX 200 benchmark in Australia ended 2.25% lower at 6978. 

European stocks started with a gap down the first trading session of the week. The German DAX is 3.73% lower at 13,070. CAC40 index is 3.74% lower at 5,804, while the FTSE MIB in Milan is 4.79% lower at 23,584. In London, the FTSE 100 is 3.51% lower at 7,143.  

Risky assets
XAUUSD Daily Chart

In the commodities markets, crude oil slides sharply lower on increased global demand worries amid the coronavirus outbreak. WTI crude is 3.93% lower at $51.20. Brent oil is 3.79% lower at $56.13 per barrel. On the other hand, Gold’s price hits fresh seven-year highs, at 1,682. Gold’s outlook is clearly bullish as the gold price continues with higher highs and higher lows. The first resistance for gold will be met at $1,689 the daily high, while the support stands at $1,600 the recent low. Silver is 1.59% higher at $18.76.    

Cryptocurrencies are trading lower today, giving up almost all of yesterday’s gains. Bitcoin is 1.81% lower at $9,784, hitting the daily low at $9,512 and the daily high at $10,018. Bitcoin momentum is positive, as it is trading above all significant daily moving averages. Support for BTCUSD stands now at $9,457 while the next major support holds at 9,000.

On the upside, first resistance stands at 10,495 yearly top and then at the 10,800 round mark. Ethereum trades 2.13% lower at 269.80 with capitalization at 29.54 billion. The first resistance for ETHUSD stands at $274.18 recent high while the first support stands at $213.47 the February low. XRPUSD is 2.38% lower at 0.2743. Litecoin (LTCUSD) is 2.25% lower at 76.84. The crypto market capitalization is at $283.91 billion.

In the Lookout: The Singapore Consumer Price Index came in at 0.8 above the expectations of 0.7 in January. 

The Germany IFO – Business Climate came in at 96.1 beating expectations of 95.3 in February. The IFO Business Climate Index registered at 96.1 while the  Germany IFO – Expectations came in at 93.40 topping expectations of 92.2. 

Trading Perspective: In the foreign exchange markets, the US dollar index is 0.22% higher at 99.55. The AUDUSD is 0.20 higher at 0.6604. NZDUSD trades 0.35% lower at 0.6325. The USDCHF pair is 0.22% higher at 0.9801.

GBPUSD trades sharply lower, giving up 0.38% lower at 1.2904. The initial support for the British pound against the USD now stands at 1.28 low which if broken, might push the pair down towards 1.25. On the upside, the first resistance for GBPUSD stands at 1.32 and then at 1.3511 recent high.

Risky assets
GBPUSD Daily Chart

EURUSD trades 0.24% lower at 1.0820 as the pair’s technical outlook is bearish. EURUSD broke below the 100-day MA, and now sellers are in control. Immediate resistance for the EURUSD pair will be met at 1.1224 the yearly high. On the flip side, the first support is at 1.0804 today’s low and then at 1.0750.

USDJPY is trading 0.19% lower at 111.31, having hit the daily low at 111.19 and the daily high at 111.67. The USDJPY pair will meet the first support at 105.43 the low from August 2019. On the upside, resistance for the USDJPY now stands at 112.18 the Friday high.

USDCAD is 0.48% higher at 1.3284 amid the weakness in the Canadian dollar due to the sharp drop in crude oil price. The USDCAD will meet first support at 1.30 the recent low while the next significant support level stands at 1.29 mark. On the other side, strong resistance will be met at 1.3300. 

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