• Asian equity markets were higher across the board as the region received much-needed reprieve from the recent sell-off
• US equity futures have performed better after-hours with the Emini S&P and DJIA back above the 3k and 19k levels respectively
• US Senate stimulus bill failed to get enough votes to clear the first procedural hurdle
• Senate Majority Leader McConnell suggested that the delays could push the stimulus package to Friday
• US President Trump said he will have an announcement soon as to timing of measures to ease coronavirus guidance
• UK PM Johnson announced a 3-week lockdown which police can enforce through fines and dispersing crowds
• DXY continued its retracement firmly below the 102.00 level to extend on the lows seen in the aftermath of the Fed’s unlimited bond buying announcement
• Looking ahead, highlights include EZ, UK, US PMIs, US New Home Sales, FPC Minutes, EuroGroup Meeting, Fed’s Bullard. Supply from Germany & US

CORONAVIRUS UPDATE

Italy COVID-19 total cases increased to 63,928 (Prev. 59,138) and the death toll rose by 602 (since Sunday) to 6,078. (Newswires) Note, the death toll in Italy slowed for a second consectuvie day

US CDC said COVID-19 total cases increased to 33,453 (Prev. 15,286 on March 20th) and deaths rose to 400 (as of prev. day at 16:00 EDT vs prev. 201 on March 20th). (Newswires)

Mainland China reported 78 additional coronavirus cases and 7 additional deaths on March 23rd vs. Prev. 39 additional cases and 9 additional deaths on March 22nd, which brings the total number of cases in mainland China to 81171 and total death toll to 3277. In related news, China's Hubei province said it is to remove travel restrictions on leaving Wuhan on April 8th. (Newswires)

US President Trump said we will have an announcement soon as to timing of measures to ease coronavirus guidance, while he added that the US will open up for business sooner than 3-4 months and that the stimulus bill is still needed because coronavirus has had a big impact on US economy even if the US reopens. Furthermore, President Trump commented that the Fed have done a good job and suggested that Fed Chair Powell has plenty of arrows. (Newswires)

US Senate stimulus bill failed to get enough votes to clear the first procedural hurdle and Senate Majority Leader McConnell suggested that the delays could push the stimulus package to Friday. (Newswires) US Treasury Secretary Mnuchin said they are very close to a stimulus deal but will not happen Monday night. Furthermore, Mnuchin and Senate Democrat leader Schumer were optimistic for a deal on Tuesday and negotiators noted progress although some issues were still under review in talks, while US Senate Schumer said the Senate could vote on a potential coronavirus stimulus deal as early as Tuesday. (Newswires)

US House Democrats introduced a USD 2.5tln stimulus bill which was said to include USD 1,500 direct payment to citizens, USD 150bln health care appropriations (plus USD 80bln loans), USD 600/week unemployment benefit for virus-affected, as well as USD 215bln of state and local funds. (Newswires)

Washington state announced to close all businesses within 48 hours, while there were separate reports of comments from the California state Governor that the stay at home order could last 8-12 weeks. (Newswires)

UK COVID-19 total cases increased to 6,650 (Prev. 5,683 on Sunday) and death toll rose to 335 (Prev. 281). (Newswires)

UK PM Johnson announced a 3-week lockdown which police can enforce through fines and dispersing crowds in which people will only be allowed to shop for basic necessities and are only allowed outdoor exercise alone or with members of your households. Furthermore, people can travel to work only where it is absolutely necessary and restrictions will be relaxed if the evidence shows the country is able to, while PM Johnson noted it is vital to slow the spread of the disease that without a huge national effort, there will come a moment where no health service in the world could possibly cope. (Newswires)

South Korea reported 76 new coronavirus cases for a total of 9037 and deaths rose by 9 to a total 120, while there were 341 fully recovered to bring the total to 3507. There were also reports that South Korean President Moon unveiled plans to double the size of the emegrency-financing aid package to KRW 100tln, while they will set up KRW 10.7tln equity market stabilization fund and KRW 20tln bond stabilization fund. (Newswires)

New Zealand Finance Minister Robertson said New Zealand banks are to offer 6-month mortgage holidays and RBNZ are to lower banks' core funding ratios, while he added the government will set up NZD 6.25bln business financing guarantee scheme and that the RBNZ agreed to lower banks' core funding ratios from 75% to 50% to help make credit available. (Newswires)

IMF sees a global economic recession in 2020 and a recovery in 2021, while it added that investors have already removed USD 83bln from emerging markets since the crisis began which is the largest ever outflow recorded. (Newswires)

ASIA

Asian equity markets were higher across the board as the region received much-needed reprieve from the recent sell-off and reacted to the Fed’s announcement for open-ended Treasury and MBS purchases, despite Wall St failing to sustain the gains amid the ongoing stalemate at the Senate on the coronavirus relief bill. Nonetheless, US equity futures have performed better after-hours with the Emini S&P and DJIA back above the 3k and 19k levels respectively following recent comments by President Trump who suggested that America will be open for business sooner than 3-4 months and as negotiators were said to be near a deal on the coronavirus stimulus bill. ASX 200 (+4.2%) and Nikkei 225 (+7.0%) rallied from the open with Australia led higher by gold miners after the precious metal surged above USD 1500/oz in the wake of the Fed’s QE bazooka, while SoftBank shares extended on the prior day’s outperformance and posted its largest intraday gain of more than 21% amid plans to offload USD 14bln of Alibaba shares. Elsewhere, Hang Seng (+3.8%) and Shanghai Comp. (+1.1%) joined in on the broad rebound with Hong Kong outperforming the mainland as participants also digested earnings releases which was the main catalyst for the biggest moving stocks. Finally, 10yr JGBs are higher and attempted to reclaim the 152.00 level after the bull flattening seen in USTs in the aftermath of the Fed’s asset purchase announcement, while the enhanced liquidity auction for 2-20yr JGBs also attracted greater demand.

PBoC skipped open market operations and are net nuetral on the day. (Newswires) PBoC set USD/CNY mid-point at 7.0999 vs. Exp. 7.1041 (Prev. 7.0940)

Japan is in agreement with the IOC to postpone the Tokyo Olympics for a maximum of 1 year. (Newswires)

UK/EU

German Economy minister Altmaier rejected the introduction of Euro bonds and called talk of such measures a "phantom debate". (Handelsblatt)            

FX

In FX markets, the DXY continued its retracement firmly below the 102.00 level to extend on the lows seen in the aftermath of the Fed’s unlimited bond buying announcement. This underpinned its global counterparts including EUR/USD which briefly reclaimed the 1.0800 handle and underpinned GBP/USD above 1.1600 where it then met resistance around its 50-hour moving average of 1.1644 and following UK PM Johnson’s announcement of a strict nationwide lockdown. Elsewhere, JPY-crosses advanced as the constructive risk tone spurred outflows from safe-haven currencies although USD/JPY failed to benefit and slipped below 111.00 due to the greenback’s woes, while antipodeans were underpinned by their high-beta properties and rebound in commodity prices, as well as the firmer than expected reference rate setting from the PBoC.

COMMODITIES

Commodities gained overnight with prices underpinned by the improved risk tone which lifted WTI crude prices by 3% to above the USD 24/bbl level, following suggestions by US President Trump of a sooner return to business for the US. Furthermore, the DoE also confirmed it will send special energy envoy Coates to Saudi in an effort to stabilize the oil markets albeit with uncertainty on the timeframe due to the coronavirus, while focus for the complex shifts to the upcoming stockpile numbers beginning with the private sector inventory report later today. Elsewhere, gold prices surged above the USD 1500/oz level although prices were eventually capped overnight on the improved risk sentiment, and copper also benefitted from the more constructive tone and strength in Shanghai commodity prices alongside news that travel restrictions on the coronavirus epicentre of Wuhan is to lift travel restrictions early next month.

US Department of Energy confirmed it will send special energy envoy Coates to Saudi Arabia to help stabilize oil markets, but added it is unclear when Coates will begin work there due to the coronavirus. (Newswires)

Barclays lowered WTI and Brent crude price forecast by USD 12/bbl to USD 28/bbl and USD 31/bbl respectively and stated tahte oil prices are likely to remain under pressure until the virus situation turns a corner. Furthermore, Barclays stated that oil prices could drop to USD 10-15/bbl range if virus situation worsens, barring political intervention, while it expects oil market imbalance of 10mln bpd in Q2 and more than 5mln bpd on average for 2020. (Newswires)

US

THE TPLEX BULL FLATTENED amid the Fed’s QE bazooka and poor risk appetite. The complex legged higher after the Fed announced its open-ended (“unlimited”) Treasury and MBS purchases, alongside a pronounced widening of the credit facilities it announced. Furthermore, the disagreement of Congress to reach an economic stimulus bill cut risk appetite, as well as casting some doubts onto the potential for an immediate ramp-up in US debt. However, Treasury Secretary Mnuchin capped the bid somewhat on mentioning of a 30-year Bond-issuing spree to ensue, although desks noted the presence of specs, CTAs and real money all buying on weakness. Meanwhile, the corporate issuance market continues to claw back, seven IG issuers coming to the dollar market on Monday, including a USD 4bln 5-parter from General Dynamics (GD), USD 5bln 5-parter from Proctor & Gamble (PG), and a USD 6bln 2-parter from Wells Fargo (WFC). By settlement, the TPLEX had bull flattened, 2s30s -4bps, 2s10s -5bps, and 2s5s -5bps; 2-year -7bps, 10-year -16bps, and 30-year -20bps. T-note futures (M0) settled 1 point 15 ticks higher at 138-06+.

New York Fed said it will buy USD 75bln in treasuries on a daily basis this week. (Newswires)