Week of Collapse in the Stock Markets, Oil Futures, Kiwi, and Aussie (Weekly Review)

2020-03-03
The spread of coronavirus in China became a major topic in the financial markets last week. Fears of a slowdown in global economic growth and a fall in corporate profits triggered large-scale stock market sales, accompanied by a highly significant drop in oil prices, the AUD and the NZD, world stock indices, and the growth of safe haven assets such as the CHF and the JPY.

In turn, the collapse in the stock market triggered the US Fed Chair Jerome Powell's release of a statement where he pointed out the growing risks for the country's economy, which could force the Central Bank to lower interest rates. Thus, the USD was losing ground in relation to the single European currency, although the entry of coronavirus into Italy, the second largest economy in the Eurozone, poses enormous risks for the latter's economic growth.

The correlation of the CHF and the JPY with the stock markets will continue in the near future. Nevertheless, do not forget that Japan is also at risk for the spread of coronavirus, so the JPY bulls should be extremely careful, since its growth can be replaced by a collapse. Caution should also be exercised for the EUR bulls, whose growth does not seem justified, given the weak Eurozone macroeconomic indicators and the differential in interest rates.

Schedule for this week:

Monday, March 2
09:30 GMT - United Kingdom. Markit Manufacturing Purchasing Managers Index (PMI);
14:45 GMT - USA. Markit Manufacturing Purchasing Managers Index (PMI);
15:00 GMT - USA. ISM Manufacturing New Orders Index;
15:00 GMT - USA. ISM Manufacturing Purchasing Managers Index (PMI).

Tuesday, March 3
03:30 GMT - Australia. Reserve Bank of Australia (RBA) Interest Rate Decision;
03:30 GMT - Australia. Reserve Bank of Australia (RBA) Rate Statement;
06:45 GMT - Switzerland. GDP;
10:00 GMT - Eurozone. Core Consumer Price Index (CPI);
10:00 GMT - Eurozone. Consumer Price Index (CPI);
USA. Democratic Primaries.

Wednesday, March 4
00:30 GMT - Australia. GDP;
07:00 GMT - Germany. Retail Sales;
07:30 GMT - Switzerland. Consumer Price Index (CPI);
08:55 GMT - Germany. Markit Composite Purchasing Managers Index (PMI);
09:30 GMT - United Kingdom. Markit Services Purchasing Managers Index (PMI);
10:00 GMT - Germany. Retail Sales;
13:15 GMT - USA. ADP Nonfarm Employment Change;
14:45 GMT - USA. Markit Services Purchasing Managers Index (PMI);
15:00 GMT - Canada. Bank of Canada (BOC) Interest Rate Decision;
15:00 GMT - Canada. Bank of Canada (BOC) Rate Statement;
16:15 GMT - Canada. Bank of Canada (BOC) Press Conference.

Thursday, March 5
00:30 GMT - Australia. Trade Balance;
00:30 GMT - Australia. Import/Export;
13:30 GMT - USA. Initial Jobless Claims;
17:00 GMT - United Kingdom. Bank of England Governor Carney Speaks;
17:45 GMT - Canada. Bank of Canada Governor Poloz Speaks.

Friday, March 6 
07:00 GMT - Germany. Factory Orders;
07:00 GMT - Germany. Industrial Production;
13:15 GMT - Canada. Housing Starts;
13:30 GMT - Canada. Unemployment Rate;
13:30 GMT - Canada. Employment Change;
13:30 GMT - USA. Average Hourly Earnings;
13:30 GMT - USA. Nonfarm Payrolls;
13:30 GMT - USA. Unemployment Rate.

Author: Anthony Porter, IAFT Analyst

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