Fed rate cut to 0%, USD drops in European session
Before the market open this week, the Federal Reserve significantly reduced the fed fund rate from the target range of 1% - 1.25% to 0% - 0.25%, and also announced the implementation of quantitative easing (QE) on the scale of US $700 billion. The market sentiment has improved for a short time, but is still pessimistic. At the current European session, global stock markets are still gloomy.
Central banks take action, but sell-offs continue
Before the market open today, the Federal Reserve suddenly further cut the interest rate by 100 basis points. Australia, New Zealand and Japan also announce the stimulus plan together, in order to deal with the impact of the global epidemic, stimulate the frozen economy. However, market concerns have not eased and selling pressure continues. At present, the Dow futures are still falling around 1000 points. Oil prices remained sluggish, and US oil fell to the $30 level.
Dollar keep strong on Friday, supported by safe-haven demand
Even though the European Central Bank did not cut interest rates by 10 basis points, it did not have much support for the euro, and even some investors were disappointed that they were bearish on the economic outlook of the euro zone. It would be a negative factor to euro. The Dollar index hit the high at 98.31 last night.
Market sentiment improved slightly on Friday European session
Market sentiment began to improve. The three major US stock index futures stop further dropping, and they are currently bounce back more than 3%. Earlier, it was reported that Pelosi, the speaker of the US House of Representatives, was close to reaching an agreement with the Trump government that introducing measures to mitigate the economic impact of the new coronavirus epidemic.
“Cash is king” ,Fed takes action
Countries over the world continue to do everything possible to assure the market. The Federal Reserve announced last night that it will inject 1.5 trillion US dollars of the short-term funds into the market. However, the measures is not likely to boost investor confidence that much.
Worries about economic recession, oil prices fall again
The pneumonia epidemic of the new coronavirus has raged in more than 100 countries around the world, and more than 120,000 people have infected, causing huge economic losses. Besides China, Italy, Iran and South Korea have had severe outbreaks. The recent rebound in oil prices has lost the momentum. US oil (WTI) today plunged to the $ 31 mark in the Asian seesion.
Dollar Index rebounded in European session, ranging around 96.5
US President Trump is considering to launch a series of fiscal stimulus packages. Although there are no more details, investors are expected the US economy, to a certain extent, still buffered by the impact of the current epidemic. On the other hand, the market expects the Fed to further cut interest rates by another 50 basis points. However, the dollar has no more decline so far, which imply that it may be priced in. Some investors believe that the US economy is still relatively stable compared to other economies, and the dollar has its own advantage.
U.S. stocks are still dropping sharply, a bearish market technically
Trump has made a national speech in Asian session , but helplessly disappointed the market. Now, WTI futures plunged 5-6% to 31 USD per barrel, and the three major US index futures fell more than 4%. According to CME FedWatch, in March meeting, the probability of the Federal Reserve cutting the interest rate by 100 basis points to 0% -0.25%, rise to more than 90%, which was about 50% earlier.
Forex and Oil market continues to fluctuate, investors remain vigilant
Investors keep paying attention to the oil market. Russia stated on Tuesday that the possibility of joint measures with OPEC to stabilize the oil market could not be ruled out. Novak, the Energy Minister of Russia, stated on Wednesday (11th) that Russia will participate in the March OPEC + meeting and continue to communicate with OPEC. Oil prices rose in early trading session on Wednesday. However, Saudi Aramco reported that the company received a instruction from the Ministry of Energy requesting to increase its maximum sustainable production capacity by 13 million barrels per day. Oil price is now dropping back in European session.
Governments continue to implement policies, the dollar rebounded
Some major central banks, such as Australia, Canada, and the United States, have made the first move. Today Wednesday(March 11)before the European session, the Bank of England also joined the team to cut interest rate by 50 basis points.