ON MONDAY
China cut its benchmark lending rate as expected to reduce borrowing costs for companies and prop up the corona-virus-hit economy, after it contracted for the first time in decades. The one-year loan prime rate (LPR) was lowered by 20 basis points (bps) to 3.85% from 4.05% previously, while the five-year LPR was cut by 10 bps to 4.65% from 4.75%.
Caution gripped Asian share markets on expectations a busy week of corporate earnings reports and economic data will drive home the damage done by the global virus lockdown, while U.S. crude prices took an early spill.
The dollar found support and a rally in riskier currencies lost steam, as investors braced for more dire news on the fallout from the corona-virus and governments across the globe moved only cautiously toward an economic re-start.
The risk-sensitive Australian and New Zealand dollars and the oil-sensitive Canadian dollar led losses with falls of around 0.3%.
Gold retreated almost 2% in the previous session as U.S. President Donald Trump announced guidelines to re-open his country’s economy on Thursday and Gilead Sciences’ report on the same day of the efficacy of its experimental drug remdesivir in treating COVID-19 patients.
Japan's economic stimulus package will be revised to 117.1 trillion yen ($1.086 trillion) from 108.2 trillion yen, boosted by the expansion of a cash payout scheme aimed at lessening the pain from the corona-virus outbreak, a draft obtained by Reuters showed.
The oil market has been under pressure due to a spate of reports on weak fuel consumption and grim forecasts from the Organization of the Petroleum Exporting Countries and the International Energy Agency. OPEC, in conjunction with allies, agreed to cut production by 9.7 million bpd beginning in May to stem a growing supply glut as stay-at-home orders and business furloughs sap fuel demand.
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