Good morning,
DXH0 97.710 -1.194 GCJ0 1470.8 -45.9 ESH0 2567.50 -1268.50 (locked limit down) CLJ0 29.41 -2.32
March Madness has taken on an entirely new meaning this year. The NCAA tournament “Selection Sunday” was replaced by the Federal Reserve and the other central banks of the world conducting “Rescue Sunday”. Global central banks held emergency conference calls, and the Fed moved up the timeline for this week’s meeting to this past weekend, and decided to cut short term rates by 100 basis points, to almost 0%. They also announced an asset purchase program of $700B on US Treasuries and mortgage backed securities. This was followed by the BOJ and RBA both announcing further increases to quantitative easing programs. The PBOC also injected liquidity into the system. Other central banks are believed to be on board as well with offering any additional support to aid the global economy.
The dollar has been under attack with this aggressive move from the Fed.
Chinese economic data released overnight was very negative, no real surprise, but none the less possibly an eye opener for what implications could be in store for the rest of the world as this pandemic works its way through the system. More restrictions on travel across countries and the US closure of schools, many businesses, restaurants and bars has added to the level on panic sweeping the globe.
Most markets are once again feeling the pain from this pandemic with much lower prices. Gold, which usually would be the safe haven in all of this, is the market that appears to be most under attack, having dropped almost $60 on the lows. Equity implosion and central bank easing would usually be very supportive for gold. However, as margin calls increase, gold appears to be the asset of choice to sell, in an effort to raise cash to meet margin requirements. US Treasuries, and other fixed income markets are the benefactors, especially with all of the announced QE.
Oil prices are down over $2, as a large decrease in global demand can be expected, especially with the Chinese data released. The same is true for most commodity markets. Volumes have been below average today, in part due to the illiquid conditions in the market and in part due to many global trading teams in the process of getting set up at remote locations. The next few days in the market will be very choppy, and a work in progress for all.
Stay dialed in for new announcements, regarding monetary and fiscal policy changes, along with new developments from the virus. As more tests are being are being administered, it should be expected to see a spike higher in the numbers for positive before things flatten out and start to abate. Thus, the fear factor is far from over and these markets will remain in disarray for some time.
Technical Moving Averages:
Product 50 day 100 day 200 day
SK0 910.25 926.50 928.75
CK0 385.00 388.50 405.50
WK0 549.25 540.50 528.75
KWK0 475.50 463.00 465.75
MWK0 543.50 542.25 552.50
SMK0 301.3 305.2 310.8
BOK0 31.32 31.84 30.80
CLJ0 51.15 54.18 54.26
GCJ0 1592.5 1542.2 1507.4
LHJ0 67.830 72.650 76.260
LCJ0 118.280 121.955 119.290
KCK0 111.30 115.65 112.00
CCK0 2717 2634 2527
CTK0 67.89 67.57 65.88
SBK0 14.08 13.54 13.24
JOK0 99.30 101.90 107.00
HGK0 264.55 268.35 266.80
HOJ0 166.15 178.74 182.51
XBJ0 89.75 173.54 173.00
NGJ0 1.925 2.092 2.228
Thanks,
Mike
Michael Clifford
141 W Jackson Boulevard
Ste 1065
Chicago, IL 60604
Trean Group, LLC
312-604-6404