Market Analysis - March 19

Market Analysis - March 19

The ECB surprised the market in the early hours of March 19 by announcing the return to unconventional monetary policy with an Asset Purchase Program (purchase of sovereign bonds) for an amount of 750 bln euros.


A real bazooka to combat widening in spreads between peripheral bonds and the German bond as a reference. Lagarde's comments during the last meeting, apparently against this measure, had triggered the increase in risk premiums and with it the concern of investors at what increasingly seemed more like the debt crisis of 2012 and subsequent years.

This measure, together with the one taken by the Bank of England, which cut interest rates to 0.10% and also increased QE to 645 bln pounds, has had a positive effect on the markets.The good news from China on the evolution of the epidemic has also contributed to this sentiment.


Stock markets have suffered less volatility than in recent days and close both European and North American markets in positive territory. The latter has also been encouraged by an interesting comment by Trump in which he stated that he is going to propose that the government can take equity stakes in companies that are excessively damaged by this episode of crisis. If this is confirmed, the market could be close to a bottom, at least temporary, of the main indices.


The USA30 index needs to break the resistance zones in 20262 first and 21190 later in daily closings to open a path for higher gains.




BrentOil reached lows at $24.92, but it has also benefited from the better market tone, recovering up to the high area of ​​$28 due to comments from the American government, on the one hand, they were planning to buy 77 million barrels for reserves and on the other Trump intended to mediate between Saudi Arabia and Russia over his dispute over production cuts.

The purchase of oil to increase North American reserves will not be significant due to its limitation, and the general market sentiment does not give much credibility to Trump's mediation capacity in this conflict. As the economy is entering a period of globalized recession, most likely, BrentOil will continue to lose value, although probably at a slower rate than in recent days.


In the currency market, GBP/USD was favored by Bank of England decisions and recovered slightly after hitting lows not seen since 1985 and then losing some of the rise.


The dollar has once again played the role of safe-haven currency. The liquidity tensions of short-term swaps of the US dollar were a consequence of that. The general sentiment is that the US dollar's dominance over the rest of the currencies will remain in the market and may even increase.


One of the contributing factors may be the emerging countries in a crisis with debt issued in the US currency, and their need to buy.

EUR/USD broke supports and reached a minimum of 1.0650 and remains in a clear bearish trend that, for the moment, is marked by a bearish channel, as can be seen in the chart, which points to objectives between levels of 1.0500-1.0550.



By: Miguel A. Rodriguez Ruiz

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The information presented herein is prepared by CAPEX.com and does not intend to constitute Investment Advice. The information herein is provided as a general marketing communication for information purposes only and as such it has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is not subject to any prohibition on dealing ahead of the dissemination of investment research.

Users/readers should not rely solely on the information presented herewith and should do their own research/analysis by also reading the actual underlying research. The content herewith is generic and does not take into consideration individual personal circumstances, investment experience or current financial situation.

Therefore, Key Way Investments Ltd shall not accept any responsibility for any losses of traders due to the use and the content of the information presented herein. Past performance is not a reliable indicator of future results.