Futures down despite ECB unveiling 1.1 trillion euros bond purchases plan - 19.3.2020

Dow erases virtually all gains since President Trump’s 2017 inauguration

US stock market erased previous session gains on Wednesday despite Congress passing the first of two planned bills providing financial aid to businesses suffering economic damage from the coronavirus pandemic, while Federal Reserve promised a liquidity program for money market mutual funds. Investors weren’t impressed by the European Central Bank announcement of new program to buy bonds worth 1.1 trillion euros throughout this year. The S&P 500 fell 5.2% to 2398.10. The Dow Jones industrial average plummeted 6.3% to 19898.92. Nasdaq slumped 4.7% to 6989.84. The dollar strengthening slowed as the consumer inflation annual rate slipped to 2.3% from 2.5% in January. The live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, rose 1.3% to 100.72 and is higher currently.

DJI plunging below MA(200) 3/19/2020 Market Overview IFC Markets chart

CAC 40 led European indexes retreat

European stocks also pulled back on Wednesday erasing previous session gains. The European Central Bank launched new bond purchases planning to buy 1.1 trillion euros worth of bonds worth 6% of the euro area’s GDP. The EUR/USD slowed its decline yesterday while GBP/USD accelerated, with both pairs lower currently. Pound lost 3.6% hitting its lowest point since October 2016. The Stoxx Europe 600 ended down 4% led by energy shares. Germany’s DAX 30 lost 5.6% to 8441.71. France’s CAC 40 plunged 5.9% while UK’s FTSE 100 fell 4.1% to 5080.58 despite government’s pledge of nearly $400 billion aid to help businesses through the crisis.

Australia’s All Ordinaries Index leads Asian indexes slump

Asian stock indices are again on defensive after sharp losses on Wall Street overnight. Nikkei retreated 1.1% to 16546.50 despite continuing yen slide against the dollar. Markets in China are falling: Shanghai Composite Index is 1% lower while Hong Kong’s Hang Seng Index is down 2.4%. Australia’s All Ordinaries Index tumbled 3.4% despite Australian dollar’s continuing slide against the greenback as the Reserve Bank of Australia cut interest rates a quarter percentage point to 0.25%.

Brent slips

Brent futures prices are extending losses today. Prices fell yesterday as the Energy Information Administration reported US crude oil inventories rose by 2 million barrels last week, eighth weekly rise in a row: May Brent fell 13% to $24.88 on Wednesday.