Market Quick Take - March 30, 2020 Market Quick Take - March 30, 2020 Market Quick Take - March 30, 2020

Market Quick Take - March 30, 2020

Macro 3 minutes to read
Steen Jakobsen

Chief Investment Officer

Summary:  Markets were back and forth in Asia after US President Donald Trump ordered social distancing measures to continue until April 30, though the mood improved by later in the session. Another important week ahead after last week saw an enormous bounce in risk appetite and a related drop in the US dollar.

An important week ahead as we get a look at whether last week’s enormous bounce in risk assets and related strong sell-off in the US dollar will find continued legs this week. The weakening of the US dollar is a particularly important support for global markets.

What is our trading focus?

  • US500.I (S&P 500) – up 4% from the opening gap of the 23.6% retracement level (support). We are still viewing the 38.2% retracement level at 2,641 as the big level to be cleared in order for this market to move substantially higher.
  • AUDUSD – the USD has rolled over across the board in recent sessions, but still has far to go before we can call a reversal – a pair like AUDUSD offers high beta within G10 currencies to the swings in global risk appetite.
  • EURJPY – we continue to look for Europe to provide answers to how it plans on responding to the Covid19 crisis after a disastrous video summit last week that clearly saw the first go at “coronabonds” – a possible back door to debt mutualization, rejected. Downside risk for EUR vs. JPY if existential concerns return here.
  • USDZAR - South African sovereign debt was downgraded by Moody’s to junk after a long time of providing the country’s only investment grade rating. ZAR traded to its lowest level ever overnight.
  • DBA.arcx (Invesco DB Agriculture Fund) – several countries are beginning to put export bans on some agricultural goods which increases the risk of rising food prices and down the road higher breakeven rates and inflation (longer term stagflation).
  • MA:xnys (Mastercard) – there are signs of weakness in China’s consumer credit market which could become the reality in the US and Europe over the coming months as the jump in unemployment cascades into consumer credit market. We are adding Mastercard as a key focus to track this market and interestingly enough the stock was quite weak in Friday’s session.
  • OILUKMAY20, OILUSMAY20: Crude oil drops to 17-year low with Goldman’s in report saying that social distancing measures now impact 92% of global GDP. The current consumption of oil demand is down by an estimated 26 million barrels/day or 25%. Matters only being made worse by the expiry of the OPEC+ deal to curb production this week. With producers led by Saudi Arabia saying they will produce at will, the race to the bottom continues.

What is going on?

US President Donald Trump said social distancing will continue in the US until April 30 after previously aiming for a lifting of measures after Easter before mid-month. Local authorities at city and state level have may have more authority in many jurisdictions and in key areas of the economy anyway.

Oil prices remain under pressure – on the demand shock, oil prices remain under extreme pressure and show extreme contango, though the market is predicting that supply destruction from this episode of low prices will mean prices farther down the road will rise to higher levels.


What we are watching next?

Momentum from last week and quarter end– correlations are very tight across asset markets and we saw a profound bounce in sentiment last week – the chief question this week is the degree to which this has established some market low for now as the market feels around for support and to what degree something like month-end and quarter-end rebalancing is behind some of the bounce in equities.

CORNMAY20, SOYBEANSMAY20, WHEATMAY20: US farmers planting intentions for the 2020-21 season will published by the US Department of Agriculture on Tuesday. It is one of the most closely watched reports by the market and it is expected that acres of corn and soybeans could spike

The missing piece – Oil – We continue to watch the oil markets as a key indicator for markets from here as the risk of defaults and insolvency continue at these price levels and a recovery in oil prices will be an important coincident indicator that some more durable stabilization has arrived.

Path to the other side of Covid19 – this is the medium term key.


Calendar today (times GMT)

  • 0900 – Euro Zone Mar. Confidence Surveys
  • 0100 – China Mar. Manufacturing and Non-manufacturing PMI - China getting back to work just as rest of world shutting down…

Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app:

Apple Sportify Soundcloud Stitcher


Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (
- Analysis Disclaimer (
- Notification on Non-Independent Investment Research (

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000

Contact Saxo

Select region


The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.