This has been a very scary week for many traders and dealers. Volatility levels have surged to 2008 levels with many global stock indices now firmly in correction territory. Coronavirus is sadly spreading across the globe and reality is kicking in thick and fast that this will not be going away anytime soon.
Yesterday’s trading session saw intense panic kick-in for the last couple of hours of the North American session. Major indices plunged over 3% in the last 100 minutes to close the day down by just shy of 5%. Currencies once again remained surprisingly orderly. The greenback sold-off. The euro flourished, while sterling sagged.
The pound appears to be in limbo at present; an economy on the mend but overshadowed by significant concern over what lies ahead when negotiating with the EU. PM Johnson has given the EU 4 weeks before he will walkway if he feels he cannot achieve a Canada style free-trade deal. As a result, it’s likely GBP remains pressured for the foreseeable.
Canadian GDP, German unemployment & inflation, and a US PCE inflation gauge will all be released today but will take a back seat. All participants will be focused on how financial markets perform heading into what’s going to appear a long and worrying weekend for many investors
Written by Viv Savani. 8:59am, February 28th 2020
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