ForexLive Asia FX news wrap: Market hungry for encouraging coronavirus news – ForexLive
Forex news for Asia trading Friday 17 April 2020
Late NY/very early Asia markets were set on fire by a report that the
coronavirus-fighting drug remdesivir was showing encouraging signs:
only did stock in the company, Gilead, rise but so did broader equity
indexes trading at the time along with forex ‘risk’. I described
at the time the ‘ballistic’ raise in risk barometer AUD/JPY (this chart posted earlier in the session):
were plenty of doubts about the report, not a scientific study, too
many caveats, and more. But, those with experience of the Asia
morning know such concerns
the caveats are all important, and relevant, and cogent, but for
traders, the moves were there and not be sneezed at (no pun intended).
the COVID-19 news we got some news for oil – Saudi and Russia said
they’d do more. Oil did not see the gains other markets did but posted
a small rise.
all this we had US President Trump providing a bit of a summary of
the ‘phased’ reopening of the US economy. This will be up to each
individual state governor but Trump’s overview was useful.
up was the wait for the China data dump – Q1 GDP and March activity
data. GDP was horrendous, a drop of 6.8% against already low
expectations. The March activity data was more interesting, not only
because it provides a more recent picture of the economy but also
because it showed a stark divergence between industrial production
data and retail sales. Long story short here is that supply
disruptions do not appear as bad as were initially thought they’d
be but demand disruption is deep. This is a recipe for deflation,
that will be exported to the globe. The other thing to keep in mind
is that China is 6-8 weeks ahead of the rest of us in its virus
impacts, the data we got from China today will be repeated all over
in the months ahead.
forex, AUD, NZD, EUR, GBP, CAD were moved higher against the USD on
the coronavirus drug news while USD/JPY moved higher alongside.
USD/JPY has since subsided to retrace most of its gain while retracements elsewhere have not been so deep.
check out the Singapore data for a surprise positive result.
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