Following a 12% plunge on Wall Street overnight, Asian stock markets showed mixed dynamics in a volatile session, with Australian shares leading the gains after a plunge a day earlier. The S&P/ASX 200 closed nearly 6% higher after plummeting by 10% on Monday. In its meeting minutes, the RBA said that the COVID-19 would cause major disruption to economic activity around the world. As a reminder, the Australian central bank cut its key rate by 25 basis points this month to a new record low of 0.5%.
In Europe, the futures were pointing to a positive open but as investors remain cautious, with sentiment being unstable, the major indexes turned lower again during the session. Still, the downside pressure is limited amid hopes that stimulus packages across the globe would help cushion the fallout from the coronavirus outbreak. As such, the Stoxx Europe 600 went from +3.6% to down by over 2.5% on Tuesday.
Meanwhile, the dollar continues to push higher nearly across the board amid a funding squeeze. EURUSD has been testing the 50-day moving average around 1.1040 and has registered March lows around 1.1025 earlier in the day. If the pressure persists, the pair may challenge the 1.10 handle in the short term. Cable extended losses to 1.21, where the lowest levels since September last year lie. Once below, GBPUSD may test the 1.20 figure.
Oil prices are clinging to the $30 psychological level, trading nearly flat for the day. Market participants refrain from buying and prefer to sell the futures on bounces, as the outlook for energy demand is getting gloomier. Later today, the API reveals its weekly industry report, and should the numbers come as bearish, the selling pressure will likely intensify.
Gold remains under a heavy downside pressure despite risk aversion prevails. The precious metal dipped below the $1,500 handle for the first time this year on Monday and remains under this psychological level, losing ground for the seventh consecutive day already. A recovery above the 200-day moving average is needed for the short-term technical picture to change for the better.