• Fed reintroduce CPFF
• Gold trades higher after five days of decline
Today's trading session on the US market started nervously after the Dow dropped below 20,000 a level not seen since 2017. However global indices managed to erase early losses after the FED announced the creation of a Commercial Paper Funding Facility (CPFF) the purpose of which is to support the flow of credit to households and businesses during the spreading coronavirus outbreak. Now Fed will be able to buy short-term debt issued by companies, supporting activity and jobs across the economy. During a news conference Treasury Secretary Mnuchin advised that the government is looking at sending direct cash payments to Americans as part of a huge $850 billion stimulus package. The Dow surged 4.3%; the S&P 500 traded 5.1% higher; and the Nasdaq rose 5.6%. After volatile session European indices also finished trading in green. DAX gained 2.25%, CAC40 advanced 2.84%, and FTSE100 rebounded 2.8%.
Gold prices also rebounded today after five days of decline, as the virus risks and recent massive sell-off on global markets continued to support safe-haven assets. Also further monetary easing from major central banks also helped gold prices, which rose by 2.86%.
Tonight Australian sales data will be published, while tomorrow traders should pay attention to the CPI reading from Canada and the GDP data from New Zealand. There are no major, market moving data scheduled for release tomorrow, therefore trading is likely to be dominated by headline news and further spread of the pandemia. Also the US Federal Reserve after today's announcement regarding CPFF has significantly raised expectations that other central banks can follow suit.
EURUSD managed to break through strong support level at 1.10638 which become new resistance and is currently trading around local support at 1.0987 Should price continue to decline further, traders should focus on another key level at 1.0875. Source: xStation5The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
