Collinsonfx Daily Market Commentary

Global equity markets continued to book gains, despite the 'Coronavirus' threat, as markets consider the spread to be contained. The coronavirus continues to spread and the death rate is rising, but at a slower rate, as confidence in the measures taken to control the spread, is improving. US equities are trading around record levels and demand pushes US bond yields and oil prices higher, reflecting market confidence. The US budget was released overnight and markets look forward to the release of the latest US CPI number, to gauge economic growth. European Manufacturing contracted 2.1%, forcing the EUR back to 1.0875, while the GBP rallied to 1.2965.

The AUD bounced back to 0.6740, while the NZD spiked to 0.6470, boosted by the latest RBNZ MPS. The RBNZ left rates unchanged but were much more hawkish than expected, citing strong fiscal stimulus, house prices and low interest rates. The Central Bank moved to a 'neutral bias' on monetary policy, from 'easing', although did stand ready to increase QE as needed. The Bank cited threats from the coronavirus and the effect it may have on economic growth, but the impact was not yet quantifiable.