Market Overview

24 March 2020

“Whatever it takes” - Fed Version

Yesterday was a day marked by the action of the North American Federal Reserve, which revealed that its Quantitative Easing (QE) program will have unlimited action. However, despite this, the Senate's postponement of Donald Trump's decision to accept the stimulus package led to a feeling of risk aversion.

In particular, the Stoxx 600 fell 4.30% while on the other side of the Atlantic, the Dow Jones depreciated 3.04%, the S&P 500 lost 2.93% and the Nasdaq closed with 0.27% less than the day before.

Regarding the debt market, debt interest rates ended up rising in all countries in Europe, reflecting the greater risk aversion for this type of more secure assets. The same has also happened in the United States.

The euro gained value for the dollar yesterday, having been boosted by the Fed's action. The pound, on the other hand, continued its downward trend resulting from uncertainty regarding Brexit and the British government's lack of response to fight the coronavirus.

Oil was also falling on this day of uncertainty, with crude oil falling by about 18%.

Gold, on the back of the Fed's decision, appreciated substantially in the perspective that the stock markets would stabilize and that, therefore, those investors who moved away from this asset to make up for their losses, now return with a buying action.


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