European Open: The rebound continues


A positive Asian session

Despite a hefty increase of coronavirus cases and deaths over the past 24 hours, investors are taking heart that all the increases are contained within mainland China, with the global spread at least slowing, even though one death was reported in Hong Kong.

Equity markets were buoyant during this morning’s Asian session, also helped along by the liquidity boost Chinese authorities injected into local markets. The China50 index surged 3.2%, the biggest one-day gain since June 20, which snapped a three-day losing streak. US indices rose between 0.70% and 0.90%, with the NAS100 index out-performing.


CN50USD Daily Chart

Source: OANDA fxTrade


Europe prepares for a higher open

Futures markets are pointing to a higher open in Europe, with the Germany30 index rising for a second consecutive day and the UK 100 index building on yesterday’s gains.

Both the Euro and the Pound have struggled the past two days as the US dollar regained some of its mojo on the back of slightly higher bond yields. US Treasuries have seen selling pressure as a modicum of risk appetite returned, with the 10-year US yield gaining 3 bps yesterday.


RBA holds rates

With a minority hoping that the Reserve Bank of Australia might cut rates when faced with the outbreak of the coronavirus (though Australia has only 12 confirmed cases – Source John Hopkins University), the unchanged announcement encouraged the Australian dollar, which rose 0.38% versus the US dollar and 0.54% versus the Japanese yen.

The statement accompanying the decision was generally more upbeat than expected, with a favourable outlook for unemployment and the housing market. With interest rates at low levels and the lag factor for transmission of prior rate cuts, the Bank deemed it prudent to leave rates unchanged. However, as always, the central bank said it was prepared to ease monetary policy further if it was needed to support growth in the broader economy.

The AUD/USD jump was the biggest intra-day gain since January 10 with the 100-day moving average at 0.6832 the next possible technical resistance point.


AUD/USD Daily Chart

Source: OANDA fxTrade


Data likely to be ignored

There’s not much to excite on the data front, with the European calendar only having UK construction PMI and Euro-zone producer prices on tap. Prior to that we have Hong Kong retail sales for December, but that will only attract attention to see how bad it might be on the back of the protests. The latest survey suggests a 17.5% decline on top of November’s 23.6% drop.

The major event for the US session will be factory orders for December, which are seen rising 1.1% m/m, a smart turnaround from November’s 0.7% contraction.


The full MarketPulse data calendar can be viewed at



This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Andrew Robinson

Andrew Robinson

Senior Market Analyst at MarketPulse
A seasoned professional with more than 30 years’ experience in foreign exchange, interest rates and commodities, Andrew Robinson is a senior market analyst with OANDA, responsible for providing timely and relevant market commentary and live market analysis throughout the Asia-Pacific region. Having previously worked in Europe, since moving to Singapore he worked with several leading institutions including Bloomberg, Saxo Capital Markets and Informa Global Markets, proving FX strategies based on a combination of technical and fundamental analysis as well as market flow information. Andrew began his career as an FX dealer with NatWest and the Royal Bank of Scotland in the UK.
Andrew Robinson

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