Global stimulus support helps equities find...>

FOREX: Global stimulus support helps equities find a crutch

- Not one, not two, but three major economies announced large-scale spending and

tax reduction plans in the latest effort to combat the now inevitable economic

slowdown from the Covid-19 outbreak. Governments in the US, Spain and the UK

announced a series of support measures that helped both European and US equities

recover from a difficult open. A EUR200bln series of measures from Spain saw the

IBEX-35 outperform, which rallied over 6% into the close. Similarly,

announcements from the US Treasury Sec Mnuchin that the White House are

formalising direct payments to citizens helped lend some support.

- Announcements came not only from the fiscal side, however, as the Fed resumed

their commercial paper facility in an attempt to soothe markets further. This

could see a further $1trl being injected into the market over the next 12

months. As a result, the greenback surged alongside equities as the Treasury

market retreated, although commodity-tied FX lagged, pressuring AUD/USD through

the GFC lows.

- US Housing Starts/Building Permits and Canadian CPI are the highlights Weds.