The CFTC’s latest Commitment of Traders report showed the fund net long GBPUSD position extending for the second straight week during the week ending February 18 a development which we think doesn’t help the market here because these new positions (and the ones added a week before) are now underwater. Sterling has slipped back below the 1.2940-50s support level to start the week as this weekend’s surprising surge of conoravirus infections inside Italy sparked broad demand for dollars.
Germany reports its seasonally adjusted Q4 2019 GDP figures tomorrow. The leveraged funds at CME added to their net short EURUSD for the 4 th week in a row during the week ending February 18 and we think they’ll remain in charge so long as the market stays below the 1.0880s. Germany reported a higher than expected IFO survey for the month of February today and while we laugh at the institute’s conclusion that “the economy seems not to be affected by the coronavirus”, traders are taking everything at face value, like they usually do, and have bid EURUSD off its lows. The euro’s new status as a funding currency has allowed it to benefit from risk-off scenarios of late but we think it's been hard for traders to ignore the 6% plunge in the Italian stock market and 10bp spike in 10yr BTP yields earlier this morning. USDCAD DAILYĮuro/dollar has fallen back below the 1.0850s to start the week after traders feel they have to price in some of the panic selling we’re seeing in Italian assets today. Some sellers have emerged at chart resistance just above 1.3300 as traders watch the WHO’s latest attempt to calm everybody down, but it appears we could be in store for a long day because there’s really nothing else major on the data docket to distract market participants from the reality of the worsening coronavirus situation outside China.Ĭanada reported higher than expected Wholesale Trade figures for the month of December just now (+0.9% MoM vs +0.5%) and while one could argue this justifies USDCAD’s pullback off the 1.3300 level from earlier this morning, we don’t traders will dwell on this 2 nd tier data for very long if broader risk sentiment deteriorates further. The market regained 1.3220s in the final moments of NY trade and there’s been a steady bid to the market ever since last night’s gap open. Dollar/CAD has quickly resumed its uptrend, after teasing traders with bearish price action below 1.3220 support on Friday. Traders are dumping stocks, crude oil futures, and commodity currencies while flocking to bonds and gold. See here for the latest updates from BNO News.Īll this has led to rising global pandemic fears to start the week. All of Iran’s neighbors (Lebanon, Kuwait, Bahrain, Afghanistan and Iraq) also reported their first coronavirus cases over the weekend as well. The outbreak continued to spread in Iran as well, but with an noticeably higher mortality rate (12 deaths amongst 47 infections). Italy reported an alarming 223 new cases over the weekend and 7 deaths, leading authorities to effectively lockdown about 50,000 people and cancel public events in 12 villages outside Milan. South Korean now has 833 reported cases and 8 deaths versus just 204 on Friday. Global markets are looking panicky this morning after the number of new coronavirus infections surged outside China over the weekend. Crude oil plunge + late regain of 1.3220 on Friday helps USDCAD resume uptrend.USDJPY longs fight risk-off flows, but market finally gives up low-111s support.EURUSD torn between its new funding currency status and pricing Italian contagion risks.Chinese yuan believing just 11 new cases outside Hubei province for Feb 24.Case count surges to 223 in Italy, 833 in South Korea, and 47 in Iran.
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