Market Recap: Stocks fall despite new efforts from the Fed; the Aussie gains for the second day in a row
US equities started the week lower despite efforts from the Fed to facilitate credit liquidity in the financial markets. The central bank surprised everyone on Monday after announcing it would be buying unlimited amounts of Treasury bonds and mortgage-backed securities to keep the cost of borrowing in the US as low as possible. It also set up new programs to keep credit flows open to corporations and state governments. The Fed's actions, which would traditionally equate to a form of fiscal stimulus, failed to keep markets afloat as the central bank's actions likely reflected the seriousness of the situation in the US. Congress however, failed to act again on Monday as Senate Democrats rejected the planned US$2tn stimulus package once again in a 49-46 vote where 60 was needed.
| Indexes |
Daily Change (%) |
Net Change |
Closing Price |
| Dow Jones |
-3.04% |
-582.05 |
18,591.93 |
| S&P500 |
-2.93% |
-67.52 |
2,237.40 |
| Nasdaq |
-0.27% |
-18.85 |
6,860.67 |
| *Source: Bloomberg |
Major currencies were mixed on Monday, with the Australian dollar leading the basket of currencies to gain for the second day in a row against the greenback thanks to actions from both the Australian government and central bank. Australian lawmakers passed the A$80bn bill that targets businesses and employment in the country as it battles with the virus outbreak. The RBA continued to inject liquidity into Australian financial markets after announcing its new quantitative easing program last week.
Safe haven assets were mostly higher on Monday as the coronavirus outbreak continues to dominate the financial markets. Gold and US Treasuries gained, while the yen weakened slightly against the dollar. Benchmark 10-year yields fell 5.9bps to 0.79% as a result.
| Safe Haven Assets |
Daily Change (%) |
Net Change |
Closing Price |
| Gold |
+3.64% |
+54.58 |
1,553.23 |
| Silver |
+5.13% |
+0.65 |
12.29 |
| JPY |
-0.27% |
-0.30 |
111.23 |
| *Source: Bloomberg |
| US Treasury yields |
Daily Change (bps) |
Yield (%) |
| 2-Year |
-0.1 |
0.31% |
| 10-Year |
-5.9 |
0.79% |
| 30-Year |
-6.6 |
1.35% |
| *Source: Bloomberg |
Oil recovered slightly after Friday's crash, likely finding relief in the Fed's actions on Monday. WTI crude futures recovered 3.23% while Brent was relatively flat, rising only 0.19%.
| Oil Futures |
Daily Change (%) |
Net Change |
Closing Price |
| Brent Crude |
+0.19% |
+0.05 |
27.03 |
| WTI Crude |
+3.23% |
+0.73 |
23.36 |
| *Source: Bloomberg |
Asia looks set for recovery on Tuesday, with both the Nikkei and KOSPI more than 4% higher in the first hour of the trading day. Futures in the US were higher as well, likely somewhat thanks to the Fed's actions and as investors anticipate the stimulus package from Congress to be passed sooner than later.
| Asia |
Daily Change (%) |
Net Change |
Last Price |
As of (GMT +8) |
| Nikkei Index |
+4.58% |
+774.28 |
17,662.06 |
8:35:25 AM |
| KOSPI Index |
+4.05% |
+60.11 |
1,542.57 |
8:55:20 AM |
| ASX200 Index |
+2.89% |
+131.17 |
4,677.20 |
8:55:06 AM |
| *Source: Bloomberg |
| US Futures |
Daily Change (%) |
Net Change |
Last Price |
As of (GMT +8) |
| Dow Futures |
+1.17% |
+217.00 |
18,695.00 |
8:08:30 AM |
| S&P500 Futures |
+1.26% |
+28.00 |
2,246.25 |
8:08:34 AM |
| Nasdaq Futures |
+1.09% |
+76.00 |
7,052.50 |
8:08:32 AM |
| *Source: Bloomberg |
Economic releases for the day ahead include (all timings in GMT +8):
- Germany Mar Markit PMI Report (P) (4.30pm)
- Eurozone Mar Markit PMI Report (P) (5pm)
- UK Mar Markit PMI Report (P) (5.30pm)
- US Mar Markit PMI Report (P) (9.45pm)