OVERNIGHT DATA AND HEADLINES
U.S. officials on Monday girded the country for a "peak death week" from the coronavirus pandemic as the accelerating American death toll closed the gap with Italy and Spain, the countries with the most fatalities to date. "It's going to be the peak hospitalisation, peak ICU week and unfortunately, peak death week," Admiral Brett Giroir, a physician and a member of the White House coronavirus task force, told ABC's "Good Morning America" on Monday. Confirmed U.S. coronavirus cases topped 336,000 on Sunday. The United States is by far the world leader with nearly twice as many cases as in Spain and in Italy, according to a Reuters rally of official data. Roughly twice as many people a day are dying in the United States versus Spain and Italy, according to the latest data. The American death roll rose by 1,144 on Sunday, pushing the total to 9,573.
British Prime Minister Boris Johnson was moved to an intensive care unit on Monday after his coronavirus symptoms worsened, but his Downing Street office said he was still conscious. Britain has no formal succession plan should the prime minister become incapacitated, but Johnson, 55, asked Foreign Secretary Dominic Raab to deputise for him. Johnson was admitted to hospital on Sunday night and had been undergoing tests after suffering persistent coronavirus symptoms, including a high temperature, for more than 10 days.
World stock markets jumped overnight, encouraged by a slowdown in coronavirus-related deaths and new cases in some of the world's hot spots, while a delay in talks between Saudi Arabia and Russia to cut supply sent oil prices tumbling again. U.S. stocks rocketed higher, with each of the major indexes rallying at least 7%, after a fall in the daily death toll in New York, the country's biggest coronavirus hot spot, fuelled optimism a levelling off of the pandemic was on the horizon. Dow Jones rose 1,627.46 points, or 7.73%, to 22,679.99, the S&P 500 gained 175.03 points, or 7.03%, to 2,663.68 and the Nasdaq added 540.16 points, or 7.33%, to 7,913.24.
USDJPY dipped 0.54%, from 108.90 to 109.25
EUR dipped back below 1.0800 from 1.0830 highs, trading as low as 1.0787.
GBP fell from 1.2315 highs down to 1.2225 lows on news PM Johnson has been sent to intensive care.
China's stock, bond, foreign exchange and commodity futures markets will be closed April 4-6 for the Qingming Festival holiday. Markets will resume trade on Tuesday, April 7.
AUD inched higher overnight, climbing up from 0.6030 to just shy of breaking 0.6100 resistance (0.6098).
NZD followed AUD’s move, NZD up from 0.5885 to a 0.5955 peak.
AUDNZD improved overnight, jumping up from 1.0225 towards 1.0265.
AUDEUR capitalised on the risk on momentum, vaulting up from 0.5573 to a 0.5646 high.
U.S. Treasury yields rose as stocks rallied on hopes the coronavirus health crisis may be slowing, with hard-hit New York and New Jersey eying possible plateaus.
U.S. 10-year yields were last up 7.8 basis points at 0.666%.
U.S. 2-year treasury yield was at 0.2622%, up 4.9 basis points.
A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes was at 40.3 basis points, about 4 basis points higher than at Friday's close.
The U.S. Treasury sold $40 billion of three-year notes into relatively soft demand, according to analyst notes.
Germany's 10-year bond yields rose to their highest in just over a week, as high as -0.39%, its highest in just over a week, but far below recent 10-month highs at -0.14%. It was up 2 basis points in late trade at -0.42%.
Gold prices surged over 2% to a more than three-week high. Spot gold was up 2.3% at $1,653.35 per ounce, having hit its highest level since March 11 at $1,655.69 earlier in the session.
Iron ore futures in China jumped as much as 3.5% on Friday after the Brazilian government ordered to halt operations at 47 mining dams as they failed to certify their stability. China's stock, bond, foreign exchange and commodity futures markets will be closed April 4-6 for the Qingming Festival holiday. Markets will resume trade on Tuesday, April 7.
Copper rose, supported by a slowdown in the death toll from coronavirus in some European countries and falling inventories. Benchmark LME copper was up 1.1% at $4,891 a tonne.
Oil prices slumped, pulling back from last week's gains after Saudi Arabia and Russia delayed a meeting of oil producers aimed at resolving growing worldwide oversupply as the coronavirus pandemic pummels demand. Brent futures fell $1.21, or 3.6%, to $32.90 a barrel while U.S. WTI crude fell $1.77, or 6.3%, to $26.57.
ECONOMIC CALENDAR TODAY
Australia - RBA policy decision (last 0.25%, forecast 0.25%). Policy rate on hold: QE will be the focus going forward.
Australia - Feb trade balance (A$bn) (last 5,210, forecast 3,750). Exports and imports to be disrupted by COVID-19.
Japan - Feb household spending (last -3.9%, forecast -3.1%). Spending to be hit again by precautionary savings.
China - March foreign reserves ($bn) (last 3106, forecast 3096). Little changed despite market volatility.
Germany - Feb industrial production (last 3.0%, forecast -0.8%). All production sectors were down YoY in the Jan read.
U.S - Feb JOLTS job openings & Feb consumer credit.
Canada - March Ivey PMI (last 54.1). The Ivey supplier index was hit particularly hard in Feb.
AUD THOUGHTS AND TECHNICAL ANALYSIS
AUD price action remained upbeat overnight, markets choosing to focus on reports suggesting some optimism related to Covid-19 and slowing death rates worldwide.
Stocks, commodities and bond yields all rallied in tandem which saw AUD up from 0.6030 lows towards 0.6098 high, also boosted by cross related buying against most of the majors (EUR, JPY, GBP).
Today we have the April Reserve Bank interest rate policy meeting (2.30pm) - widely expected for no changes to the interest rate outlook given the significant easing of monetary policy in March which included the unveiling of government bond purchases, market liquidity measures and very low-cost funding for banks. Also released is the February trade balance number. The trade surplus held at a sizeable $5.2bn in January - the calm before the storm. There is extreme uncertainty around this release as the balance of two numbers - exports and imports - could both move in a very large range. Markets remain drawn to further Coronavirus headlines as investors become increasingly cautiously optimistic. The infection numbers out of Italy and New York look like they are improving although it’s still early days and close scrutiny remains on the constant data releases. For the AUD, risk on price action achieved goal #1 to revisit 21-DMA (0.6100) which has capped the overnight advance higher and sets the tone for todays open at 0.6080. Rising daily RSI and the April monthly bull hammer give technical outlook a bullish lean. A close & sustained hold above the 21-DMA would increase bull sentiment. This may provide enough incentive to trade back towards last weeks 0.6215/35 resistance levels.