Markets bounce back big as UK budget eyed
Markets went on a wild ride overnight, buoyed by talk of government stimulus.
The USD made some gains overnight, pushing paired currencies down. The EURUSD began the day at $1.14386 and edged up to a high of $1.14578 shortly after the open. The losses soon after, where a period of stability mid-session being the only highlight of the day. The euro hit lows of $1.12735 late in the day. it has come off those lows and is now trading at $1.13119. The GBPUSD opened the day at $1.31247 and nudged up to a high of $1.31290 in the opening hour of trade. It was a steady decline from that point until late-session trading saw the losses accelerate as it hit lows of $1.28798. It is not far from those lows, currently trading at $1.29020.
The Dow was all over the place last night as talk of government stimulus helped prop it up. The index opened at 23,770.29 and fell to lows of 23,458.66 in the opening hour of the day. It surged off that low and by mid-session it was at a near-session high of 25,035.39. Just as it looked like a good time for buyers to get back in, the Dow plummeted back down to 23,672.62 a few hours later. However, that wasn’t the end of the ride as the Dow again rallied, this time peaking at 25,063.30. It has since come off those highs quite considerably and is now trading at 24,431.00. The Dax followed a similar path to the Dow after opening at 10,529.34. The German index posted some solid gains over the first half of the day, hitting highs of 11,031.93 mid-session. It fell from those highs, dropping to lows of 10,409.55 late in the day before bouncing back and closing at 10,865.27. It has opened lower on Wednesday and is now trading at 10,626.32.
The day ahead will be mainly dominated by the coronavirus and talk of government stimulus. Meanwhile, the UK will be releasing their annual budget later tonight in what will be a keenly watched event, given the impact the coronavirus is having on world economies. This is also the first budget release by a post-Brexit UK. Although the budget relates to the financials of the previous year, the government will also outline where funds will be allocated for the year ahead.
Data published today includes:
Canada – Capacity Utilisation Rate
US – CPI & Core CPI, Crude Oil Inventories, Federal Budget Balance, Treasury Secretary Steve Mnuchin speaks
UK – GDP, Manufacturing Production, Construction Output, Goods Trade Balance, Index of Services, Industrial Production, NIESR GDP Estimate
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