Market Overview

6 March 2020 12:49

Mark Goichmann

Fears over the coronavirus are inflating prices for safe haven assets like the Japanese Yen. The VIX fear index rose from 15 to almost 47 for the last two weeks. The Yen is one of the beneficiaries. The Japanese currency strengthened from 112.2 to 105 against the Greenback or to the almost unprecedented amount of 6.4%, which has not been seen since 2016. The market has raised a fried egg flag. Investors are inspired by the weakening US Dollar due to the interest rates cut in the United States from 1.75% to 1.25% and a further possible cut on March 18.
6 March 2020 12:29

Lysakov Sergey

The world's leading central banks have completed a series of intense mutual consultations at the beginning of a hard week by launching concerted actions. At least, in theory, these measures could revive the weakening economic activity and provide some stimulus for the global financial system. In real life when factories are stopped because of quarantine or some important business conferences are cancelled, consumers appear less in public places.
5 March 2020 13:38

Lysakov Sergey

Oil prices remain under constant pressure despite new data released by the US energy department on Wednesday. Statistics showed a decrease of distillate stock for the seventh week in a row with distillate and gasoline volumes available in the US storages declining by more than four million barrels over the last week. The number of barrels of commercial crude oil stored by the US companies increased by 785,000 barrels only for the last week and by 1.65 million over the last three weeks.
5 March 2020 09:26

Frederico Aragao Morais

Last week was marked by the biggest fall in the equity markets over the last decade. The panic in place was the consequence of the growing concerns about the possibility that the coronavirus could become a global pandemic with serious implications for economic growth. Despite the fact that China revealed encouraging data that reflected a decline in growth of the number of infected people, the virus has continued to spread to other countries - especially in South Korea, Iran and Italy.
5 March 2020 08:05

Maria Gregoriou

It seems as if the markets are still bracing themselves as "the Dollar struggled to make headway on Thursday, as very low U.S. yields and the prospect of even more monetary easing held back gains, while virus fears supported the safe-haven yen," according to Reuters. The decision by the Federal Reserve (Fed) on Tuesday to introduce a 50 basis point interest rate cut had caused, according to Reuters, the Dollar down to a five-month low of 106.64 yen. The picture today shows that the Dollar once again "failed to forge ahead in Asia, leaving the Euro steady at $1.
4 March 2020 17:44

Frederico Aragao Morais

Yesterday, the focus was on the G7 meeting, as well as the reduction of the US Federal Reserve's (Fed) leading interest rate by 50 basis points. The G7 meeting ended up having a relatively mixed interpretation in the financial markets since despite having announced that it would be willing to adopt expansionary measures, it had not however had any concrete measures. Shortly thereafter, however, it was possible to see the Fed lowering its interest rate and that this decision had a mixed impact on the stock markets as it also ended up sending out an "alarm" message.
4 March 2020 13:03

Lysakov Sergey

An emergency rate cut by 50 basis points at once from the US Federal Reserve (Fed) yesterday seemed to strengthen rather than calm fears over the spreading of the coronavirus and the impact it had on global economic realities. Some piquancy of the situation is that the Fed's brave action came just two weeks ahead of a scheduled FOMC meeting, when the market "crowd" had fully priced in a similar 50-basis-point cut. The mixed and even confusing reaction of many investors until now is probably due to the haste of the Fed's decision.
4 March 2020 10:57

Mark Goichmann

Gold price movements might look paradoxically lately if the bullion is considered as a traditional safe heaven asset. The "first wave" of the coronavirus in mainland China in early February triggered the surge in gold prices to almost $1700 toz by February 24. It could be assumed that the recent slump on stock markets could drive the bullion prices even higher to the highs which were reached in 2012 of $1790 toz. But that eventually did not happen. Gold prices "suddenly" fell from $1692 to $1565 toz last week in line with deteriorating oil prices and the S&P 500 index.
4 March 2020 08:02

Maria Gregoriou

The news on Tuesday that the U.S. Federal Reserve (Fed) would cut interest rates led to a drop in the Dollar this morning. This move from the Fed was provoked by the impact that the world economy has been feeling since the initial finding and spread of the coronavirus. The Fed hopes to protect the U.S economy from being hit by the chaos which surrounds the virus. After the Fed decided to cut rates by a half percentage point to a target range of 1.00% to 1.
3 March 2020 18:50

Frederico Aragao Morais

Yesterday, market sentiment was marked by greater confidence coming from the fact that several central banks were open to the idea of lowering their key interest rates. Several countries have also shown availability to have a more expansive fiscal policy. This led to an appreciation in the main stock markets, where it was possible to observe the Stoxx 600 - the main European reference index - rise by 0.09%. On the American side, Dow Jones gained 5.09% while the Nasdaq grew by 4.49% and the S&P 500 appreciated by 4.60%.
Market Focus

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