Pandemic prompts renewed risk-off - The.......>

FOREX: Pandemic prompts renewed risk-off

- The formal declaration of Coronavirus as a global pandemic by the World Health

Organization triggered renewed risk-off flows in what was already a volatile

session. After the decent Wall Street close Tuesday, equities were sold

aggressively from the open as hopes of an imminent stimulus package from the

White House were dashed. 

- This worked in favour of the JPY once more, keeping options markets on footing

for a test on the Y100 level. GBP sank after the first emergency rate cut from

the BoE since 2008, which was followed by the UK government announcing one of

the largest stimulus packages globally, with GBP30bln in spending plans aimed at

countering any virus-inspired economic slowdown. Oil prices suffered further,

dragging oil-tied FX with it and pressing NOK to be the day's poorest performer.

- Thursday's focus turns to the ECB rate decision and press conference. Markets

are already baking in action from the central bank after aggressive stimulus

from the BoC, Fed, BoE and RBA. On the data docket, US PPI data and weekly

jobless claims are due.