Global turmoil continues!!Posted on Sunday, March 22 2020 at 3:03 pm GMT+0000
Daily life came to a screeching halt the past week as governments, businesses and consumers took drastic steps to halt the COVID-19 pandemic. Most governments closed schools and cancelled events and flights, some of them imposed country-wide lock-downs, and some declared a national emergency to combat virus outbreak. And in an attempt to limit-down the negative consequences of the corona-virus outbreak and support their economies, governments passed massive amounts of stimulus, promising more to come, if necessary. While global central banks continued to slash interest rates and provide liquidity through QE and extension of credit lines. The Federal Reserve slashed its benchmark rate by a full 100 basis points on Sunday – bringing the target range back down to 0-0.25%. The BoE slashed interest rates to a new all-time low of 0.10% on Thursday. The ECB increased its total asset purchases for the year to 1.1 trillion euros… but seems like all these measures taken failed to bring order into the market.
Liquidity issues have been a key factor in global currency markets during the past week as investors ramping up their stockpiling of cash. The sole beneficiary was the US dollar since it’s considered to be the most liquid. And in their rush to liquidity investors were selling everything even the traditional havens such as gold and government bonds.
The focus will remain this week turned towards governments and central banks decisions. And the question is, will they announce further stimulus to keep their economies afloat as lock-downs around the world become more prevalent? Is that even possible as most central banks has now almost exhausted their conventional policy ammunition?
Most data releases were ignored in the last couple of weeks, and same is expected this week. However, the main coming releases are as the following:
– German Manufacturing PMI (Mar) (08:30 GMT)
– UK Composite PMI (09:30 GMT)
– UK Manufacturing PMI (09:30 GMT)
– UK Services PMI (09:30 GMT)
– US New Home Sales (Feb) (14:00 GMT)
– German Ifo Business Climate Index (Mar) (09:00 GMT)
– UK CPI (YoY) (Feb) (09:30 GMT)
– US Core Durable Goods Orders (MoM) (Feb) (12:30 GMT)
– Crude Oil Inventories (14:30 GMT)
– UK Retail Sales (MoM) (Feb) (09:30 GMT)
– BoE Interest Rate Decision (Mar) (12:00 GMT)
– BoE MPC Meeting Minutes (12:00 GMT)
– US GDP (QoQ) (Q4) (12:30 GMT)