Wall Street stocks closed higher overnight, as investors were digesting a series of emergency measures from central banks and governments amid the virus crisis. The Dow Jones Industrial Average nearly 1%, the S&P 500 closed up 0.5% and the Nasdaq gained about 2.3%. A day earlier, the Dow fell below 20,000 for the first time since February 2017.
Asian markets have stabilized as well, following a few weeks of steep losses, with South Korea’s Kospi leading the gains among the regional indexes, adding over 7% – the first gain since March 10. China’s Shanghai Composite added 1.6%. The People’s Bank of China kept its new benchmark lending rate unchanged today. Markets in Japan were closed for a holiday.
In Europe, equities followed suit and staged a bounce after a volatile and painful week. Investors are weighing the governments’ efforts to mitigate the economic impact of coronavirus pandemic. This week, the European Central Bank, US Federal Reserve and the Bank of Japan have all announced stimulus measures to support the markets and the economy. According to the latest reports, the German government plans to set up a 500-billion-euro rescue fund for firms. The pan-European Stoxx 600 jumped nearly 5% on Friday.
On the data front, Germany’s producer prices fell last month after rising in January. The producer price index declined 0.1% year-on-year, reversing a 0.2% increase seen previously. Economists had expected a 0.2% rise.
EURUSD bounced from three-year lows on Friday and extended the recovery to the 1.0830 area, where the 50-hour SMA acted as a local resistance and brought the euro back below the 1.08 mark. The inability to see sustained gains after an aggressive slide confirms that the euro remains weak and could further give up the intraday gains as the selling pressure around the greenback looks limited after an impressive rally during the week.
In other markets, oil prices jumped above the $30 handle after Trump’s comments on the intention to resolve the conflict between Saudi Arabia and Russia. A daily close above this psychological level will confirm a bounce from long-term lows. Meanwhile, gold prices have switched into a recovery mode and regained the $1,500 figure amid a retreat in the greenback. The next upside target arrives at $1,535, where the 100-DMA lies.
