Uninspired by a huge emergency package approved by the Senate, US stocks suffered decent losses overnight, with the Dow closing below 20,000 for the first time since 2017. All three major indexes finished about 5% lower. In Asia, investors continued to sell stocks, as investors feared a recession from the coronavirus pandemic. Equities failed to maintain their early gains, despite the European Central Bank announced the launch of a 750-billion-euro emergency bond purchase program. Meanwhile, the Australian Central Bank cut its interest rate to 0.25% — its lowest ever.
Still, the European markets managed to open higher on Thursday, though the upside impetus looks modest as investors keep a cautious tone. S&P 500 futures turn positive on the day as well, erasing early losses. The sentiment has improved somehow due to additional measures announced by the ECB while a wider picture remains gloomy, as the coronavirus continues to spread rapidly. In other words, the current recovery attempts look fragile, and risk aversion may reemerge at any point.
On the data front, Germany preliminary IFO business climate index arrived at 87.7 in March versus 96.1 previously and 82.0 expected. The current assessment came in at 93.8 versus 98.9 in January. Business morale represented the weakest reading since August 2009, suggesting the coronavirus outbreak is already taking a toll on the German economy. Eurozone January construction output rose 3.6% in March versus -3.1% previously. According to the latest reports, the German government said to plan a 40-billion-euro aid package for small businesses and self-employment.
Elsewhere, the dollar continues to rise against major rivals. EURUSD struggled to regain the 1.10 handle and turned negative on the daily timeframes again, threatening the 1.08 area that acted as support yesterday. It looks like the pair will remain under the selling pressure in the near term as the safe-haven dollar demand persists. Meanwhile, USDJPY has got back above all the three moving averages and has settled above the 109.00 handle. Once above 109.55, the greenback will target 110.00.