Markets quiet, but anxious with uptick in Covid-19 cases

Financial markets were relatively calm overnight with little conviction, even as global Covid-19 cases increased. Asian equities edged lower after China and South Korea reported increases in virus cases. On the other hand, European equities edged higher despite more cases in Germany. US equities are poised to open steady, as Dr. Anthony Fauci will speak today at a Senate hearing and is expected to deliver a serious warning against reopening the economy too soon. Bond yields moved higher with the Treasury offering $32 billion 10-year notes today and the Fed purchasing for the first time corporate debt from investors as part of its emergency lending program. The dollar is lower on light volume.

“We must accept finite disappointment, but never lose infinite hope.”

Martin Luther King Jr.
  • FX Rates
    May 12, 2020

    Rates are not real time. Rates are today's indicative mid-market rates as of time of publishing, which may vary. Please contact SVB for a current quote.


  • USD
    The dollar is steady to slightly lower, with the Dollar Index lingering around 100. There was little reaction from this morning’s release of US Core CPI, which posted a record -0.4% decline MoM. Headline CPI fell 0.8% in April from March, the biggest decline since December 2008. Yesterday’s Treasury sale of $42 billion of 3-Yr notes went at a record low yield of 23 basis points. Today, $32 billion of 10-Yr notes will be sold. The UST 10-Yr edged higher to 0.71%.
    GBP
    The UK pound edged higher versus the dollar and steadied against the euro as UK Chancellor, Rishi Sunak, said the government program of paying the wages for 7.5 million citizens will remain through August. The pound recently had fallen amid confusion over plans to ease lockdown restrictions.
    EUR

    The euro is higher even as Germany recorded its first increase of new Covid-19 cases in four days following a gradual reopening of its economy. European equities moved slightly higher. EU Trade Commissioner Hogan said he wishes to resume US-European trade talks in the hope of strengthening economic growth through expanded trade.

    CAD

    Higher oil prices helped the Canadian dollar strengthen slightly versus the US dollar. The USD/CAD currency pair continues to hover around 1.40. The Canadian economic calendar is light today.

    ASIA/PACIFIC
    The Chinese yuan strengthened overnight even as the city of Wuhan, where the pandemic began, reported its first new cases in several weeks.
Contact Us

For more analysis on FX markets or information regarding SVB's FX services:

Contact your respective SVB FX Advisor or the SVB FX Advisory Team at fxadvisors@svb.com.
See all of SVB's latest FX information and commentary at www.svb.com/trends-insights/foreign-exchange-advisory

Subscribe to receive the Daily FX Update in your inbox.

By providing your email address and clicking on the Subscribe button below, you consent to receive emails from Silicon Valley Bank for your chosen categories. You also consent to the terms of our Privacy Notice. If you have privacy questions, you may contact us at privacy@svb.com. You can withdraw your consent at any time.

Scott Petruska, CFA
WRITTEN BY
Scott Petruska, CFA

Insights from SVB Industry Experts

 
SVB experts provide our customers with industry insights, proprietary research and insightful content. Check out these related articles that may be of interest to you.
Dollar slides as markets await Trump’s China comments
 
Positive economic outlook prevails as dollar weakens
 
Dollar inches up on US/China concerns
 
Dollar falls to lowest since March
 
Dollar strengthens as US-China tension becomes focus
 
US dollar advances for first time this week