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DAILY MARKET REPORT

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The Federal Reserve cut interest rates to near 0% on a Sunday evening emergency meeting, as a follow-up move less than two weeks before it cut rates for the first time. The Fed has also committed to increasing its balance sheet by around $700 billion over the next few weeks to provide some support to the US economy.

EQUITIES

Asian shares trading lower on Monday, after the Federal Reserve’s second emergency interest-rate cut this month fueled worries about the outlook for the world’s largest economy. Stocks in Tokyo (-2.46%) lost relatively less than their peers. The CSI slumped 4.30%, as Hang Seng dropped 4.50%.

OIL

Oil prices had a bearish start to a new week over mounting worries about the potential economic fallout of the coronavirus pandemic after the Fed announced its second emergency rate cut this month.

CURRENCIES

On Monday the euro jumped to $1.1230. The US dollar is trading weaker against its major peers after the FED cut interest rates for the second time within a month.

GOLD

Gold recovered from last week low and jumped to $1575 in the overnight trading session. Gold gained almost 3% after the Fed cut its interest rates down to 0-0.25%.

Economic Outlook

On early Monday RBNZ also cut its key interest rate by 75bp to 0.25% from 1.0% in another emergency decision, with Governor Orr assuring markets that the rate will stay this low for at least 12 months. While the People’s Bank of China injected 100 billion yuan (11.57 billion pounds) into financial institutions on Monday.

The important event for today will be G7 meetings. This event will take place all day and we could expect to hear comments from leaders throughout the event.

Coronavirus Update: Spain followed Italy’s lead in imposing nationwide curbs will allow its 46 million people to leave home only to go to work. In the Philippines, soldiers and police sealed off the crowded capital, Manila, from most domestic travellers.

New York City announced it will shut down the largest U.S. public school system as early as Tuesday, sending more than 1.1 million children home. Governors in California, Illinois and Ohio told all bars and restaurants to close or reduce their number of customers.

Technical Outlook

GOLD: The precious metal opened this week with a bullish gap but later the pair retraced to lower and closed the gap. The gold price currently trading at $1510 and the next immediate support at $1500.

Quote of the day: Monday is the perfect day to correct last week’s mistakes.   

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