Participants brace for another volatile week of trade
Financial markets have opened for the fresh week with some monumental moves across various asset classes. First and foremost, the price of oil has crashed by almost 30%. This comes as Saudi Arabia launches a full-on price war after Russia failed to agree to production cuts to stabilise prices on Friday.
This has impacted global stock markets, which were set to be on tenterhooks after Italian authorities took the decision to lock-down Milan, a city of 10+ million people. The main Italian index has plunged 10% while other European bourses have dropped c. 6% – 8%. US indices also find themselves in a spot of bother, down 5%. FX markets have been impacted. The Japanese yen finds itself up nearly 2.5% with the Swiss franc is also up significantly too. EURUSD is up 1%, while the pound has gained marginally versus the greenback but has fallen against the euro.
This week will see the majority of focus around coronavirus and the pace at which it spreads. Close attention will be on governments and central banks to observe what measures they introduce to dampen the impact.
On the economic calendar, the European Central Bank will meet on Thursday. It’s highly likely they chose to ease monetary policy to soothe markets. This may include an interest rate cut as well as providing banks with enhanced liquidity. We’ll also see some tier 1 Chinese data as the effects of the virus on their nation become visible.
Written by Viv Savani. 9:07am, March 9th 2020
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