March and First Quarter 2020 in Figures

March 31, 2020

Similar to February, the dollar’s net movements against the euro, yen, and  Swiss franc were an oasis of stability amid the continuing financial market drama elsewhere. For the whole first quarter, the dollar was particularly well-bid against sterling and commodity-sensitive currencies like the Australian, New Zealand, and Canadian dollars.

For central bank watchers, March was unlike any other month. As the Covid-19 pandemic swelled exponentially, a broad swatch of monetary stimulus packages, including interest rate cuts, quantitative asset purchases, and other measures to support liquidity and ensure money market functionality were offered all over the world, and policymakers didn’t hesitate to act in between scheduled meetings. The Bank of Canada, for example, implemented three rate cuts of 50 basis points during the month, two of which were announced after emergency meetings. In Japan, Switzerland and Euroland where policy interest rates are already below zero percent, stimulus was provided through non-interest rate tools.

Equities and oil prices plunged. Note below how similar the first quarter declines were in the DOW, German Dax, British Ftse, Japanese Nikkei and Toronto Stock Exchange. Investors haven’t really begun to differentiate the comparative hit that different economies are about to endure. There’s too much uncertainty to discern which countries will suffer less.

Ten-year U.S. and Canadian sovereign debt yields have dropped much more sharply than European and Japanese ones.

 

10-Yr Yield 03/31/20 Chg in March Change in 1Q
U.S. 0.67% -50 Basis Points -125 Basis Points
Germany -0.48% +13 -29
Japan 0.0% +16 +3
U.K. 0.35% -9 -46
Canada 0.70% -43 -100
Switzerland -0.87% +45 +12
CB Policy Rate 02/28/20 Chg in March Change in 1Q
Fed funds target 1.50/1.75% -150 Basis Pts -150 Basis Pts
ECB deposit rate -0.50% 0 0
BOJ policy rate -0.10% 0 0
BOE Bank Rate 0.10% -65 -65
Swiss 3M Libor -1.25/-0.25% 0 0
FX 03/31/20 Mar Chg in $ 1Q Pct Chg in $
EUR/USD 1.1025 +0.1% +1.7%
USD/JPY 107.54 -0.3% -1.0%
USD/CHF 0.9624 -0.3% -0.5%
GBP/USD 1.2820 +3.3% +6.7%
AUD/USD 0.6149 +5.9% +14.1%
NZD/USD 0.5960 +4.9% +12.9%
USD/CAD 1.4054 +4.7% +8.2%
USD/CNY 6.9919 +1.3% +1.7%
Equities 03/31/20 Chg in March Change in 1Q
S&P 500 2586 -12.5% -19.9%
Nasdaq 7700 -10.1% -14.2%
Djia 21917 -13.7% -23.2%
Dax 9936 -16.4% -25.0%
Nikkei 18917 -10.5% -20.0%
Ftse 5672 -13.8% -24.8%
Canada TSE 13334 -18.0% -21.9%
Swiss SMI 9312 -5.3% -12.3%
Commodities 03/31/20 Chg in March Change in 1Q
Oil, $ per barrel 20.48 -54.5% -55.0%
Gold, $ per ounce 1583.40 +0.3% +23.5%

Copyright Larry Greenberg 2020.  All rights reserved.  No secondary distribution without express permission.

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