US stocks tumbled on Wednesday as investors continued to grapple with the fallout from the coronavirus outbreak. Also, investors showed some nervousness ahead of data on the US labor market. All three major indexes closed around 4.5% lower. Today in Asia, markets were mixed amid the deepening fears in anticipation of US jobs data and despite China and South Korea have shown signs of controlling the virus.
As such, Australia’s S&P/ASX 200 dropped 2% while China’s Shanghai Composite and South Korea’s Kospi both reversed course and rebounded from Wednesday’s losses, up 1.8% and 0.6% respectively. Hong Kong’s Hang Seng dropped 0.3%, and Japan’s Nikkei 225 closed 1.37% lower.
In Europe, stocks surged at the open along with U.S. equity futures, in part because oil prices rose after China unveiled plans to boost its reserves. Meanwhile, the number of confirmed COVID-19 cases in the U.S. surpassed 200,000 Wednesday, doubling since Friday, suggesting the current recovery in risky assets may be short-lived as virus-related concerns will persist.
Meanwhile, the euro remains under the selling pressure across the board. Yesterday, EURUSD derived support at 1.09 but as the prices retain a bearish bias on Thursday, the possibility of further losses remains high. Once below this level, the pair will first target the 1.0880 area. However, should the US jobs data disappoint again, the greenback will have to give up some gains, suggesting the pressure surrounding the common currency will ease.
As for other markets, gold prices are flat today after yesterday’s recovery from local lows around $1,565. Despite the recent bounce, the short-term technical picture for the precious metal remains negative as long as the prices stay below the $1,600 psychological level. On the positive side, the bullion continues to trade above the 100- and 200-DMAs. On the 4-hour timeframes, the dynamics looks neutral, suggesting the current consolidation could continue for some time before the market decides on a clear direction.