(19 March 2020)DAILY MARKET BRIEF 1:US dollar rallies on fund, CP liquidation.

The world is on the verge of a severe economic depression, and unfortunately, without having fully recovered from the 2008 financial crisis.
Factories around Europe slow down or halt production in an effort to contain further contagion of the coronavirus, or because employees start being tested positive for coronavirus.
The pandemic continues shaking small, medium, and international size businesses, the first two being on the brink of severe financial difficulties as a result of several weeks long shutdowns.

More globally, there is an increasingly restricted goods and people circulation across globe. Airline companies are perhaps the most hit by the coronavirus-led crisis. US government rejected the airline companies’ demand for $30 billion in grants but proposed a $50-billion loan package to help them survive the crisis. Schengen countries closed their borders, as US and Canada agreed to stop all non-essential traffic between the two countries.
The European Central Bank (ECB) announced a fresh 750-billion-euro worth bond and private securities purchases package, while the Reserve Bank of Australia (RBA) cut its policy rate to the fresh historical low of 0.25%.
Alas, equities’ race to the bottom continues at full speed.

The S&P500 lost up to 10% on Wednesday, before a late session rebound trimmed losses into the close. But US futures continued their journey south after the bell, as Asian stocks remained heavily offered. WTI crude tanked to $20 a barrel, before rebounding near 12% to $24 in Asia. FTSE futures (+0.88%) hint at recovery at the open. But British energy stocks will likely remain on the chopping block, after having shred 50% to 60% of their value since the beginning of this year.
And despite heavy losses, we do not rule out the possibility of a deeper bear market. Gone is the view that the monetary and fiscal stimulus would help bettering the investor mood.

Looking at data, inflation in Japan slowed to a four-month low in February, and the worst is yet to come.

By Ipek Ozkardeskaya