The Market Panic Remains (Weekly Review)

Tensions and panic in non-financial markets last week persisted. The worldwide spread of coronavirus, and especially throughout Europe and the USA, triggered another large-scale wave of sales on the world’s stock markets, and as a result world stock indices updated the lows reached the week before last. Oil futures are still subject to the pressure from sellers, since a possible slowdown in the growth of the Chinese economy and the global economy as a whole threatens energy consumption.

Amid the panic and collapse of the indices, world central banks have initiated measures that are supposed to help avoid the financial collapse observed in the second half of the 2000s. The Bank of England, the US Federal Reserve, and the Reserve Bank of New Zealand resorted to lowering interest rates. The Fed, in addition to lowering to 0.25-0.00 percent, also announced an increase in balances of at least $700 billion.

This news caused the USD to rise and the indices to recover, but with the beginning of the current week, the USD was again under pressure, and stock trading was suspended due to another collapse in the Asian session. Thus, in the medium term, the market volatility will remain; falling indices will drive demand for the JPY and CHF, and their recovery will put pressure on them.

Schedule for this week:

Monday, March 16
12:00 GMT - Eurozone. EU Finance Ministers Meeting;
14:00 GMT - USA. G7 is to Discuss Coronavirus Turmoil.

Tuesday, March 17
00:30 GMT - Australia. Reserve Bank of Australia Meeting Minutes;
09:30 GMT – United Kingdom. ILO Unemployment Rate (3M) (Jan);
09:30 GMT - United Kingdom. Average Earnings;
10:00 GMT - Germany. ZEW Economic Sentiment;
12:30 GMT - USA. Retail Sales;
13:15 GMT - USA. Industrial Production.

Wednesday, March 18
23:00 GMT – Australia. Reserve Bank of Australia Assist Governor Ellis Speaks;
10:00 GMT - Eurozone. Consumer Price Index (CPI);
10:00 GMT - Eurozone. Core Consumer Price Index (CPI);
12:30 GMT - Canada. Consumer Price Index (CPI);
12:30 GMT - Canada. Core Consumer Price Index (CPI);
18:00 GMT - USA. Fed Interest Rate Decision;
18:30 GMT - USA. Federal Open Market Committee (FOMC) Press Conference.

Thursday, March 19
21:45 GMT – New Zealand. GDP (QoQ) (Q4);
00:30 GMT - Australia. Unemployment Rate;
06:00 GMT - Japan. Bank of Japan Press Conference;
07:30 GMT - Switzerland. Swiss National Bank (SNB) Interest Rate Decision;
07:30 GMT - Switzerland. Swiss National Bank (SNB) Monetary Policy Assessment;
12:30 GMT - USA. Initial Jobless Claims;
12:30 GMT - USA. Philadelphia Fed Manufacturing Index.

Friday, March 20
01:30 GMT - PRC. People's Bank of China Loan Prime Rate;
12:30 GMT - Canada. Retail Sales.
Author: Anthony Porter, IAFT Analyst