Thursday, January 23, 2020

Oil extends losses as virus death toll increases; ECB to unveil broad guidelines on framework review

  • China
  • Pound
  • Stocks
  • European Central Bank


Market Recap: Oil extends losses as virus death toll increases; ECB to unveil broad guidelines on framework review

Wall street ended mostly mixed on Wednesday after renewed worries that the new coronavirus could curb economic growth dragged on gains earlier in the trading session. The DJIA and S&P500 ended mostly flat, while the Nasdaq managed to edge out gains thanks to a rally in tech stocks.

Indexes Change (%) Net Change Closing Price
Dow Jones -0.03% -9.77 29,186.27
S&P500 0.03% 0.96 3,321.75
Nasdaq 0.14% 12.96 9,383.77
*Source: Bloomberg

The dollar remained mostly flat against other major currencies except the loonie and sterling. The loonie weakened against the dollar to as low as 0.7603 after the BoC appeared to be more dovish on future monetary policy while leaving its current rates unchanged. Cable rose to as high as 1.3153 on Wednesday after CBI's business sentiment survey beat expectations of -20, surging to 23 from -44. The better-than-expected business sentiment in the UK sent the pound soaring over the day as investors pared back on speculation for a rate cut by the BoE later this month. Cable ended the trading session 0.71% higher at 1.3142.


Safe haven assets extended gains as investors hedge their risk against the new virus from China as death tolls rises to 17. Gold and the yen both gained on Wednesday. US Treasuries also continued rising, with benchmark yields falling 1bp to 1.77%.

Safe Haven Assets Change (%) Net Change Closing Price
Gold 0.04% 0.61 1,558.78
Silver 0.29% 0.05 17.64
JPY 0.03% 0.03 109.84
*Source: Bloomberg
US Treasury yields Change (bps) Yield (%)
2-Year 0 1.53%
10-Year -1 1.77%
30-Year -1 2.22%
*Source: Bloomberg

Oil continued to fall on Wednesday as outlook for demand sours. Brent and WTI crude oil futures tumbled for the second session in a row on Wednesday, both falling more than 2%. WTI crude oil futures continued to decline early on Thursday, falling 1.20% as of 8.17am (GMT +8)

Oil Futures Change (%) Net Change Closing Price
Brent Crude -2.14% -1.38 63.21
WTI Crude -2.81% -1.64 56.74
*Source: Bloomberg

Stocks in Asia looks set for losses on Thursday morning, as fear continues to drive capital flow out of equities. The Nikkei, KOSPI and ASX200 were trading lower on Thursday morning. Hang Seng Futures lost 197 points overnight, hinting that the index may be set for more losses today.

Asia Change (%) Net Change Last Price As of (GMT +8)
Nikkei Index -0.76% -181.86 23,850.91 8:08:00 AM
KOSPI Index -0.89% -20.10 2,247.00 8:28:00 AM
ASX200 Index -0.41% -29.23 7,103.50 8:27:35 AM
Hang Seng Futures -0.70% -197.00 28,121.00 2:59:56 AM
*Source: Bloomberg

P&G (after US market close), American Airlines (after US market close) and Southwest Airlines (7.30pm GMT +8) are set to release their quarterly earnings report today.

The ECB will be meeting today for its first monetary policy meeting of the year. Analysts expect the central bank to hold its rates at current levels and continue its asset purchase program through the year. Focus will be on its framework review, which is expected to be launched today.

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

  • ECB Monetary Policy Meeting Statement/Decision (8.45pm)
  • US Jan 18 Initial Jobless Claims (9.30pm)
  • US Dec Leading Index (11pm)