Dollar a little softer

The dollar is a little softer after the Fed announced another suite of measures to address the Covid-19 crisis, trading at over $1.08 against the euro this morning and at around $1.1650 against sterling, which leaves the pound marginally weaker against the single currency at about 93p. Meanwhile, equity markets fell again yesterday, by between 3 % and 5% (they are now down 30%-plus year to date in 2020), while core bond yields ended slightly lower on the day

The Fed announced a number of measures including unlimited purchases of government and mortgage-backed bonds to “support smooth market functioning and effective transmission of monetary policy to broader financial conditions”;  establishing new programs that, taken together, will provide up to $300 billion in new financing to support the flow of credit to employers, consumers and businesses; while it also expects to “announce soon the establishment of a Main Street Business Lending Program to support lending to eligible small-and-medium sized businesses”

In a relatively positive development, China’s Hubie province has said it is to effectively lift the quarantine on the city of Wuhan from 8th April, around 11 weeks after lockdown was imposed by the authorities

Services sector activity in France plunged in March judging by the just released PMI, which fell deep into contractionary territory this month (29.0 from 52.5 in February). Taken together with the manufacturing PMI (down to 42.9 from 49.8) it suggests “GDP is collapsing at an annualised rate approaching double digits” say IHS Markit who compile the data

PMI data for the Euro Area as a whole, as well as for the UK and US, are due later today