Core consumer prices in Tokyo rose 0.4 percent in March from a year earlier, government data showed on Friday. The core consumer price index for Japan’s capital, which includes oil products but excludes fresh food prices, compared with economists’ median estimate for a 0.4 percent annual rise.

  • Tokyo area March cpi excluding fresh food, energy prices +0.7 pct YoY – govt.
  • Tokyo area March coreCPI +0.4 pct YoY – govt (Reuters poll: +0.4 pct).

Market implications

The data is not important at the moment. COVID-19 is. The re-emergence in the Tokyo new cases of the virus is concerning markets and the estimates of damage from the postponement of this year’s Olympic Gamse in Tokyo by one year range from 600 billion yen (US$5.4 billion) to 2 trillion yen (US$18 billion). However, eve the delay is overshadowed by the coronavirus outbreak which has deepened Japan’s recession fears – Tourism has ground to a halt.

 

At the Task Force presser, The US President Donald Trump is moving from one topic of discussion to another but mostly focussed on COVID-19.

Trump also said on Thursday he was likely to be speaking with President Xi Jinping of China later in the day and cast doubt on Beijing’s figures about coronavirus cases as the number in the United States reached about 70,000. Trump has praised Xi’s handling of the coronavirus while also emphasizing that it originated in China and accusing the country of not being transparent enough about it.

Key comments

  • Trump says navy hospital ship comfort due to arrive in new york harbour on Monday.
  • House must now pass the stimulus package without delay.
  • Trump says he will be on hand at the Norfolk naval base in Virginia to see it off on Saturday.
  • I think we are doing well with the vaccines, we’re going to know very soon about a lot of them.
  • People want to go back to work, (to work)
  • We have to go back (to work). 
  • People will be practising social distancing.
  • We have to keep airlines going.
  • We will work hard to help cruise lines.
  • Will be discussing the virus with Xi tonight. 
  • “I’ll have a call with president xi of china” tonight, adding the coronavirus “came from china” and that country took advantage of the US until he came to the Whitehouse.
  • Economic uncertainty hasn’t passed.
  • Says he has used defense production act on “two minor occasions”.
  • Says he likes the idea that cruise lines have to register in united states to receive relief.
  • Says airlines are vital to our country, we need to keep the airlines going.
  • Says china’s Xi did not ask him to “calm down” the language he uses to refer to coronavirus.
  • Says looks like US can do another trade deal with China, though it may have to wait for US presidential election.
  • Trump says looks like US can do another trade deal with China, though it may have to wait for US presidential election. 
  • US Vice president pence says Abbott labs has submitted to FDA for approval of a coronavirus test that gives results in 15 minutes.

Market implications

US benchmarks were rallying hard on Thursday on a strongly positive week for stocks as stimulus kicks investors risk appetites back into play as the US Senate passage of a $2 trillion stimulus package spurred the markets on, seemingly ignoring the hard data with the first-time jobless claims ran up to a record 3.28 million last week.

  • Wall Street Close: US benchmarks were rallying hard on Thursday, cheering stimulus

 

 

  • NZD/USD fails to hold onto a four-day winning streak.
  • New Zealand’s second-tier data came in weaker.
  • The US COVID-19 Task Force Briefing suggests Trump-Xi talk.
  • US House voting on the coronavirus bill, virus updates will provide fresh impulse.

NZD/USD pulls back from an eight-day top to 0.5945 amid the early Asian session on Friday.  The kiwi pair recently witnessed declines following New Zealand’s ANZ-Roy Morgan Consumer Confidence and Total Filled Jobs data while the US dollar seems to have benefited from the calls of the US-China talk and risk reset.

New Zealand’s March month ANZ-Roy Morgan Consumer Confidence slipped below 122.1 prior to 106.3 whereas the Total Filled Jobs for February rose to 2.21M from 2.2 earlier.

In his Coronavirus Task Force Briefings, US President Donald Trump signaled that he will talk to China’s President Xi Jinping and discuss the virus issue on Thursday. The US leader also pushed for a US coronavirus bill that is in the final stages of being the law.

The US dollar dropped earlier amid the coronavirus (COVID-19) outbreak in the world’s largest economy. The cases grew beyond 81,000, as per the New York Times, while surpassing China. Furthering the greenback weakness was a spike in the Jobless Claims that rose beyond 3.0 million from a measure upwardly revised 282K.

On the other hand, the risk-tone remained positive with Wall Street marking the third day in green while the US 10-year treasury yields also recovering back to 0.85%. However, the stock futures are showing a sign of risk reset off-late.

Looking forward, market players are likely to concentrate more on the US House voting on the bill as well as virus headlines while comments from the Trump-Xi call and the US Michigan Consumer Sentiment might also offer intermediate moves.

Technical analysis

A sustained break of a 10-day SMA level of 0.5845 enables the buyers to target 21-day SMA near 0.6060.

 

  • USD/MXN probes three-day losing streak.
  • S&P downgrades Mexico from BBB+ to BBB while keeping the negative outlook.
  • The US dethrones China with the largest coronavirus numbers.

With the global rating giant S&P probing the Mexican peso buyers, USD/MXN takes a U-turn from a seven-day low of 22.86 to 23.25 amid the early Asian session on Friday.

The S&P cuts down the nation’s credit rating from BBB+ to BBB while keeping the outlook negative. Traders reacted to the news in full steam despite inactive market hours in Mexico.

The reason could be traced from the US neighbor’s sufferings due to the coronavirus (COVID-19) as well as the beating through the latest declines in the oil prices.

The nation’s statistics mention 475 cases of the pandemic but President Andrés Manuel López Obrador has been criticized over not being able to take the case seriously while also hiding the actual figures. Further, Governor Miguel Barbosa was also recently triggered public outrage while claiming that the poor are immune to the virus.

On the other hand, oil prices dropped from $25.60 to $24.20 by the end of the settlement period for Thursday. The catalyst to blame could be the demand-supply mismatch due to the virus and the increased production.

It should also be noted that the US dollar isn’t immune to the epidemic as the US Dollar Index also dropped heavily to seven-day low with the surge in COVID-19 cases making it surpass the epicenter China.

Investors will now concentrate on the US House voting on the $2 trillion aid package as well as the virus data/updates for fresh impulse. It should also be noted that the call to stricter rules near the US-Mexico border might also be observed for intermediate moves.

USD/MXN forecast chart

The pair needs to regain its place beyond the 10-day SMA level, currently at 23.87, on the daily chart, failure to do so can keep dragging it to 21-day SMA near 22.00.

Trend: Pullback expected

 

  • AUD/USD probes a five-day winning streak.
  • The US dollar takes clues from the spike in coronavirus cases, making the world leader, as well as Jobless Claims.
  • US Fed Chair, Treasury Secretary tried to placate traders.
  • The economic calendar is light in Asia, US data, House votes on the US COVID-19 Bill will be the key.

AUD/USD defies the previous five-day rise, also stepping back from an eight-day top, while taking rounds to 0.6050/55 at the start of Friday’s Asian session. The Aussie pair earlier cheered broad US dollar weakness amid the surge in the coronavirus (COVID-19) outbreak in the US as well as a spike in the US Jobless Claims. That said, the recent pullback seems to lack a major catalyst than just an early-day risk reset as the greenback continues to remain weak.

With above 81,000 virus cases, as per the New York Times, the US becomes the world’s most infected nation, while overtaking China, from the disease. Earlier, the calls of the widespread outbreak and the further spread of the pandemic into the world’s largest economy weighed on the greenback.

The US Jobless Claims that skyrocketed above 3.0 million for the week ended on March 20 is, in our opinion, contributed a less to the greenback’s weakness. The reason could be traced from the previous expectations of even a larger number as well as the change in policies concerning who can apply for the unemployment benefits.

It’s worth mentioning that the US Senate’s ability to pass 2.0 trillion worth of aid package as well as the Fed Chair’s signal that the bank can unlock a plethora of funds if needed helped the US equities to register the third day of gain in a row. Further, US Treasury Secretary Steve Mnuchin turned down the calls of availing market break while suggesting a shorter trading period could be preferred even if it is not his preference.

The market’s risk-tone remains positive with Wall Street benchmarks extending recoveries while the US 10-year treasury yields trimming the previous day’s losses to revisit 0.85% mark.

Given the lack of major data on the Asian economic calendar, investors will keep eyes on the coronavirus headlines while waiting for the US House voting on the bill that passed the Senate on Thursday. Additionally, the US Michigan Consumer Sentiment will also be important to watch during the later part of the day.

Technical Analysis

Unless declining back below 0.5800, AUD/USD is likely extending the recovery moves towards 21-day SMA near 0.6230.

 

  • EUR/USD retracement up challenges the 1.1060 resistance and the 100 SMA on the four-hour chart.
  • The next levels of resistance are seen near 1.1100 and 1.1163.
 

EUR/USD daily chart 

 
EUR/USD bounces sharply from the 2020 lows while challenging the 100 SMA on the four-hour chart. This Thursday the correction up accelerated and broke above the 1.1000 psychological level. 
 

EUR/USD four-hour chart

 
EUR/USD is challenging the 1.1060 resistance and the 100 SMA on the four-hour chart. As the market gained considerable momentum the spot could continue to trade higher towards the 1.1100 and 1.1163 price levels in the medium term while support can be expected near the 1.1014, 1.0980 and 1.0900 levels, according to the Technical Confluences Indicator.
 
 
Resistance: 1.1060, 1.1100, 1.1163
Support: 1.1014, 1.0980, 1.0900
 
 

Additional key levels