Monday, March 23, 2020

Asia Times: US oil markets suffers as more states in the US restrict non-essential movement; global coronavirus cases surge past 300,000

Tags
  • Dollar
  • Gold
  • Yen
  • Pound
  • Stocks
  • Oil

03232020a

Market Recap: US oil markets suffers as more states in the US restrict non-essential movement; global coronavirus cases surge past 300,000

Stocks on Wall Street started Friday's trading session in the green but was unable to sustain gains in the index after several states in the US declared a lockdown. State governments of New York, Nevada and Florida were the latest to be added to the list of states that were restricting all non-essential movement.

Indexes Daily Change (%) Net Change Closing Price
Dow Jones -4.55% -913.21 19,173.98
S&P500 -4.34% -104.47 2,304.92
Nasdaq -3.79% -271.06 6,879.52
*Source: Bloomberg

US indices had its worst week since the 2008 global financial crisis as fear of the coronavirus spreading across the US escalated. The DJIA fell 17.30%, dragged down by shares of Boeing. Boeing's shares erased another 26.70% over the week as the coronavirus crisis added to its 737 max aircraft woes. The S&P500 retreated 14.98% over last week to lose 28.66% YTD. The US now has 33,276 cases of the coronavirus. In Europe, Spain and Italy are struggling to keep the virus at bay, as the number of deaths skyrocketed to 1,772 and 5,476 respectively as of Monday morning.

Indexes Weekly Change (%) Net Change Closing Price
Dow Jones -17.30% -4,011.64 19,173.98
S&P500 -14.98% -406.10 2,304.92
Nasdaq -12.64% -995.36 6,879.52
FTSE100 -3.27% -175.33 5,190.78
Euro Stoxx -1.45% -37.52 2,548.50
German Dax -3.28% -303.13 8,928.95
Nikkei -5.04% -878.22 16,552.83
KOSPI -11.59% -205.29 1,566.15
ASX200 -13.05% -722.67 4,816.63
CSI300 -6.21% -242.09 3,653.22
Hang Seng -5.11% -1,227.84 22,805.07
Straits Times -8.48% -223.26 2,410.74
*Source: Bloomberg

In the foreign exchange market, the Dollar Index traded relatively flat on Friday, but still managed to rise on the day for the fourth consecutive trading day. Sterling gained the most after the British government signalled that more stimulus will be available for British workers and businesses affected by the virus.

The RBNZ announced on Monday that it will be buying up to NZ$30bn worth of government bonds over the next 12 months. The kiwi extended losses on Monday morning following the announcement as a result.

03232020b

Safe haven assets were mostly higher as the number of coronavirus cases surged past 200,000 on Friday. Gold gained 1.86% to end just shy of 1,500. The yen slightly weakened against the dollar to maintain 110's level. US Treasuries surged again, pulling benchmark 10-year yields 29.5bps lower to 0.85%.

Safe Haven Assets Daily Change (%) Net Change Closing Price
Gold +1.86% +27.41 1,498.65
Silver +4.12% +0.50 11.99
JPY -0.20% -0.22 110.93
*Source: Bloomberg
US Treasury yields Daily Change (%) Yield (%)
2-Year -13.7 0.31%
10-Year -29.5 0.85%
30-Year -36.8 1.42%
*Source: Bloomberg

US oil prices were pressured the most on Friday as shutdowns across multiple states are likely to threaten demand for oil in the country. WTI fell 12.66%, or US$3.28 to US$22.63 per barrel. The outlook for oil continues to be tilted to the downside as more non-essential human traffic starts to be restricted across more countries

Oil Futures Daily Change (%) Net Change Closing Price
Brent Crude -5.23% -1.49 26.98
WTI Crude -12.66% -3.28 22.63
*Source: Bloomberg

Asian indices will likely suffer today after gaining on Friday to compensate for losses in the US last Friday. The number of coronavirus cases across the globe surged to over 300,000 over the weekend. The Nikkei may be the exception, starting Monday's trading session 0.11% higher, likely benefitting from a weakening yen.

US futures tracking major induces were each more than 4.5% lower as of 8.21am (GMT +8), signalling that there is likely to be more room for US stocks to decline this week. More negative news flowed over the weekend in both the EU and US. German Chancellor Angela Merkel said that she will be quarantined after having contact with a doctor that tested positive for the virus. British Prime Minister Boris Johnson said that the UK's NHS may be overwhelmed within weeks. An anticipated financial aid package from the US government hit a roadblock in Congress after leaders from both the House and Senate disagreed on the allocation of the nearly US$2tn stimulus package. Expectations of an agreement between US leaders range from 24 hours to a week.

Asia Daily Change (%) Net Change Last Price As of (GMT +8)
Nikkei Index +0.54% +88.60 16,641.43 8:07:25 AM
KOSPI Index -6.60% -103.38 1,462.77 8:27:20 AM
ASX200 Index -6.65% -320.13 4,496.50 8:27:05 AM
*Source: Bloomberg
US Futures Daily Change (%) Net Change Last Price As of (GMT +8)
Dow Futures -5.01% -954.00 18,099.00 8:21:26 AM
S&P500 Futures -5.00% -114.50 2,176.50 8:21:28 AM
Nasdaq Futures -4.59% -319.75 6,651.50 8:21:27 AM
*Source: Bloomberg

Economic releases for the day ahead include (all timings in GMT +8):

  • US Feb National Activity Index (Chicago Fed) (8.30pm)