Short
Relief Bounce On Tuesday, But A Turn Around Is Not Secure
Bottom-picking, after officials step up efforts and some optimism creeps in, is helping lift spirits today. As one looks at the equity bounces, it is important to remember that among the biggest rallies take place in bear markets. Nearly all the bourses in Asia-Pacific rallied, led by a 7% advance by Japan's Nikkei and an 8%+ surge in South Korea's KOSPI. Most other markets were up 2%-5%. Europe's Dow Jones Stoxx 600 is up nearly 5% after falling 4.3% yesterday. US stocks are firmer, and early indications suggest a 3%-4% early gains. Bond markets are much quieter, and most benchmark yields are 3-5 bp higher.
The dollar is seeing its recent gains pared. The Norwegian krone has been the weakest of the majors, and it is leading the move today with a nearly 6% gain, while the yen and Canadian dollar are the laggards, gaining around 0.7%. Among emerging market currencies, theMexican peso has been exceptionally pressured, and it nearly 2.5% higher, while the JP Morgan Emerging Market Currency Index is about 0.25% higher.
The Federal Reserve continues to offer new measures of financial and economic support, and despite claims that it is "all in," there is more that will do. Yesterday, it announced open-ended purchases and an aggressive action plan this week to buy $375 bln of Treasuries and $250 of mortgage-backed securities. The Fed is setting up a special purpose vehicle, like it did for commercial paper, for asset-backed securities, and for the first time, corporate bonds. Each SPV is funded by $10 bln from the Treasury's exchange stabilization fund. A new SPV is expected to be announced shortly that would support small and medium-sized businesses.
Meanwhile, the debate over fiscal efforts continues, and, optimistically, a resolution may be seen before the end of the week. The House Democrats have drafted a $2.5 trillion alternative to the White House/Senate version. The House's plan calls on a temporary reprieve from personal debt (credit cards, mortgages, and car payments, and a 10k maximum write-off of student debt.
The Bank of Canada is expanding the range of assets it can buy and sell to include corporate and local government bonds. Mexico's President AMLO is opposed to granting company bailouts or tax amnesty. Brazil's President Bolsonaro indicated that yesterday's decree that allows companies to halt work contracts for four months without salary payments (that helped send BRL to new record lows yesterday) will be revoked.
The US dollar is softer but within the range seen yesterday against the Canadian dollar (~CAD1.4335-CAD1.4660). A break of yesterday's lows could see CAD1.4150. Initial resistance now is seen near CAD1.4450. The greenback rose to a new record high (~MXN25.4585) before reversing lower. Yesterday's low was near MXN24.36, though initial support may be encountered around MXN24.50.
In resume we will keep having news of new taxes of unemployments around the world so this will keep pulling the DOW and SPX500 down at least for the next month.
Follow me please, it help me a lot .
The dollar is seeing its recent gains pared. The Norwegian krone has been the weakest of the majors, and it is leading the move today with a nearly 6% gain, while the yen and Canadian dollar are the laggards, gaining around 0.7%. Among emerging market currencies, theMexican peso has been exceptionally pressured, and it nearly 2.5% higher, while the JP Morgan Emerging Market Currency Index is about 0.25% higher.
The Federal Reserve continues to offer new measures of financial and economic support, and despite claims that it is "all in," there is more that will do. Yesterday, it announced open-ended purchases and an aggressive action plan this week to buy $375 bln of Treasuries and $250 of mortgage-backed securities. The Fed is setting up a special purpose vehicle, like it did for commercial paper, for asset-backed securities, and for the first time, corporate bonds. Each SPV is funded by $10 bln from the Treasury's exchange stabilization fund. A new SPV is expected to be announced shortly that would support small and medium-sized businesses.
Meanwhile, the debate over fiscal efforts continues, and, optimistically, a resolution may be seen before the end of the week. The House Democrats have drafted a $2.5 trillion alternative to the White House/Senate version. The House's plan calls on a temporary reprieve from personal debt (credit cards, mortgages, and car payments, and a 10k maximum write-off of student debt.
The Bank of Canada is expanding the range of assets it can buy and sell to include corporate and local government bonds. Mexico's President AMLO is opposed to granting company bailouts or tax amnesty. Brazil's President Bolsonaro indicated that yesterday's decree that allows companies to halt work contracts for four months without salary payments (that helped send BRL to new record lows yesterday) will be revoked.
The US dollar is softer but within the range seen yesterday against the Canadian dollar (~CAD1.4335-CAD1.4660). A break of yesterday's lows could see CAD1.4150. Initial resistance now is seen near CAD1.4450. The greenback rose to a new record high (~MXN25.4585) before reversing lower. Yesterday's low was near MXN24.36, though initial support may be encountered around MXN24.50.
In resume we will keep having news of new taxes of unemployments around the world so this will keep pulling the DOW and SPX500 down at least for the next month.
Follow me please, it help me a lot .
Note
Sucesfull bear channel!
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.