Market Overview

12 March 2020

Now it is Officially a Pandemic

Yesterday was, once again, a day marked by a huge aversion to risk. Panic is very present in the volatility of the markets and the bear market is now very clear. Moreover, the director general of the World Health Organization (WHO), Tedros Adhanom Ghebreyesus, declared the virus as an international pandemic.

In particular, the European benchmark index - Stoxx 600 - declined by 0.74% while the main American stock indexes suffered large declines. The S&P 500 fell by 4.89% while the Nasdaq fell by 4.70% and the Dow Jones lost 5.86%.

In the debt market, behavior was relatively mixed. After German and American interest rates decreased over the past few days, yesterday they ended up correcting upwards. The Portuguese and Italian interest rates, for example, who have been on an upward trend, declined yesterday.

The Euro had a mixed behavior throughout yesterday, having decreased by 0.03% when compared to the Dollar. The Pound too lost value as the Bank of England lowered its key interest rate.

Oil, on the other hand, fell with the news that Saudi Aramco - Saudi Arabia's state oil company - would increase its production capacity to 13 million barrels per day. Therefore, production will not only grow (to 12.3 million barrels per day) but also its capability will also.

Gold, on the other hand, had a mixed day, having ended up falling on a day of greater risk aversion.


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