Monday April 6th, 2020

Coronavirus data continues to drive world markets as global cases hit +1.3mio and related deaths surpass 70k. Equity markets and US$ index firmed on reports of slowing cases in Italy, Spain and the White House reporting optimism amid stabilizing NY cases. Alternatively, Asian currencies firmed despite Coronavirus cases rising across the region, with the Philippines and Indonesia reporting sizable increases. In Japan the JPY weakened with reports that the country is at the brink of announcing a state of emergency to curb the virus spreading. OPEC+ meeting was delayed as negotiations continues; the pressure is rising with the US President suggesting that tariffs could be an option. Intraday no key US data out today, so focus will be on OPEC and coronavirus updates.

Oil prices fell 3.5% as OPEC+ delays meeting on output cuts to April 9th, after Saudi Arabia & Russia delay the meeting. Russia’s top oil negotiators commented that they are “very close” to a deal on output cuts. C$ starts the week firmer, adopting an optimistic tone ahead of the OPEC+ meeting. A break of 1.4080 opens C$ up for further strength towards 1.3920 next, resistance intraday remains at 1.4250. Intraday OPEC & Coronavirus updates and BoC business outlook Survey will provide direction today.

Euro holds at the key 1.0800 support level despite weak Sentix investor confidence which fell Apr -42.9, the worst since 2008 global financial crisis. Encouraging coronavirus headlines with Germany reporting 4th day of lower cases, Italy reporting slowest number of deaths in two weeks and Spain reporting the lowest number of fatalities in 10 days. With European lockdowns anticipated to continue until the end of April expect investors to remain cautious about returning to Euro. A clean break of 1.0800 yields 1.0640 next support level, resistance remains at 1.1050 level vs US$.

GBP weakened to 1.2200 on news that the UK PM was admitted to hospital for his coronavirus. Reports that the PM is doing well in hospital saw the GBP rebound quickly, rallying beyond Fridays close retesting 1.2300. Intraday, reports of the PM’s health, OPEC and Coronavirus reports will be watched closely for GBP direction. GBP should find support at 1.2250, but a clean break yields 1.1980 the next support on the topside 1.2450 remains key resistance.