Yesterday, European markets ended up falling. Its main index - Stoxx 600 - depreciated by 0.02%. The main reason for these events was probably the unpleasant news regarding the coronavirus. In particular, Chinese authorities reported that the number of infected people had increased dramatically due to a flaw in the method used to diagnose patients. Considering this news, it maybe thought that the impact of the virus on the real economy may be greater than initially thought and predicted.
As a consequence, in days of greater risk aversion, interest rates on sovereign public debt tends to fall and this is what happened yesterday in Europe.
Moreover, the Euro continues to fall, and yesterday it hit a two-year low. Therefore, it is possible to observe that in days of greater uncertainty in the markets, and if this uncertainty does not directly affect the United States, the Euro tends to depreciate against the Dollar as the American currency is the main driving currency in the financial markets.
The Pound Sterling, on the other hand, continues to appreciate and therefore its "undervaluation" is corrected, which has been sometimes pointed out by analysts. The fall in the value of the Euro when compared to the British currency was quite significant.
Crude oil continues to recover and the bad news regarding the coronavirus seems not to affect the price trend in any way. In addition, the International Energy Agency (IEA) also predicted a drop in demand in this first quarter, however without any impact on a possible decrease in price. Yesterday the rise was 0.47%.
Regarding gold, on days of greater risk aversion, it tends to increase its value. Yesterday turned out to be one of these days.
Risk Warning: Trading Forex and CFDs on margin carries a high level of risk and may not be suitable for all investors. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Prior to trading, you should take into consideration your level of experience and financial situation. TeleTrade strives to provide you with all the necessary information and protective measures, but, if the risks seem still unclear to you, please seek independent advice.
© 2011-2022 Teletrade-DJ International Consulting Ltd
Teletrade-DJ International Consulting Ltd is registered as a Cyprus Investment Firm (CIF) under registration number HE272810 and is licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 158/11.
The company operates in accordance with the Markets in Financial Instruments Directive (MiFID).
The content on this website is for information purposes only. All the services and information provided have been obtained from sources deemed to be reliable. Teletrade-DJ International Consulting Ltd ("TeleTrade") and/or any third-party information providers provide the services and information without warranty of any kind. By using this information and services you agree that under no circumstances shall TeleTrade have any liability to any person or entity for any loss or damage in whole or part caused by reliance on such information and services.
TeleTrade cooperates exclusively with regulated financial institutions for the safekeeping of clients' funds. Please see the entire list of banks and payment service providers entrusted with the handling of clients' funds.
Teletrade-DJ International Consulting Ltd currently provides its services on a cross-border basis, within EEA states (except Belgium) under the MiFID passporting regime, and in selected 3rd countries. TeleTrade does not provide its services to residents or nationals of the USA.