A U.S. dollar funding crisis and fears of an economic collapse had traders grabbing as much Greenbacks as they could all week.
United States Headlines and Economic data
Monday:
- Federal Reserve cuts rates to zero to support the economy during the coronavirus pandemic
- Powell says the Fed doesn’t see negative rates as ‘appropriate’ policy for the United States
- Empire State manufacturing index sees record decline to -21.5 in March
- Big risk aversion sentiment to start off the week as traders priced in the growing probability of a big hit to the global economy by the coronavirus pandemic; now realized after U.S. President Donald Trump said the U.S. economy “may be” headed for recession and the surprise weekend stimulative actions announced by the Bank of Japan, the Reserve Bank of New Zealand, and the Reserve Bank of Australia.
Tuesday:
- Fed’s Kashkari: Negative interest rates are unlikely but not off the table
- U.S. Retail sales drop 0.5% in February
- Fed announces another $500 billion operation for overnight repo funding markets
- U.S. Home Builder Confidence Declines But Remains Solid Amid Rising Risks
- U.S. industrial output shows strength in February, just prior to coronavirus disruption
- Fed’s Mester explains ‘no’ vote on rate cut, says she would back commercial paper help
- U.S. job openings rebound; labor market strong before coronavirus outbreak
Wednesday:
- U.S. housing starts fall, building permits near 13-year high
- Kudlow Floats U.S. Government Equity Stakes in Companies Helped
- Another big risk aversion day in the financial markets, which actually saw a break in the usual risk behavior relationships as even bonds and gold fell. This is likely due to the rising concerns of bank liquidity, an extreme demand for U.S. dollars, and the rising probability of a deep global recession.
Thursday:
- Fed’s Kashkari says U.S. Congress needs speedy action as layoffs rise
- Philly Fed manufacturing index sees big plunge in March
- US weekly jobless claims jump amid coronavirus layoffs
- Fed moves to satisfy global demand for dollars
- Trump invokes Defense Production Act to expand production of hospital masks and more
- U.S. lawmakers pushing ahead with third coronavirus aid package
- The Conference Board Leading Economic Index for the U.S. edged up 0.1% in February to 112.1
- Risk sentiment swings positive on the Thursday trading session, likely a reaction to the continued stream of stimulus actions by global central banks, including a €750bn bond-buying program from the ECB, interest rate cuts and QE from the RBA, and the announcement of a third coronavirus aid package this week from U.S. lawmakers. The Greenback pulls back against the comdolls, while continuing its rally against the safe havens.
Friday:
- Fed opens dollar swap lines for nine additional foreign central banks
- U.S., Mexico agree to restrict non-essential travel over shared border
- U.S. existing home sales surge to 13-year high in February
- Clearing firm Ronin Capital unable to meet capital requirements at CME – another a sign that the turmoil in financial markets is putting extreme stress on some firms, raising the odds of financial system risk.
- Risk sentiment turned back negative during the U.S. session likely moving on counter currency news and coronavirus updates, including actions to limit the accelerating number of cases of coronavirus, and the damage it is doing to financial market liquidity and the economy.
- In case you missed it, here is a cheat sheet on Who Has Done What for Their Economies Since the Coronavirus Pandemic Hit
