Economic aid is on its way. Will the markets be saved?

By 31/03/2020News
Morning Stock News

Gold   1614,28
(-0,40%)

EURUSD   1,1013
( -0,26%)

DJIA  22008
(-0,74%)

OIL.WTI  21,045
(+3,87%)

DAX   9873,25
(+ 0,02%)

Monday ends on an optimistic note for the markets. We can see that there is a certain decline in volatility in all sectors of the economy. Investors have calmed down a bit after Donald Trump’s performance on Sunday. From the speech we heard a radical change in tone on the pandemic and the economic situation.


Chart of the Day Brent

Chart of the Day Brent

Of course, everyone asks the question, what happens next? Probably many companies, from airlines to hotels, will be on the verge of bankruptcy, and the next month will only begin to bring depressing news. The good news is that volatility in the markets is falling. Investors understand that the virus will sooner or later be defeated, and the euro and dollar will not go anywhere. On Monday, the DAX index rose by 2% and the DOW index by almost 3%.


Euro

Yesterday’s comments on the European currency were correct. The Euro did not have enough strength to move higher. In the USA the statements and actions of the government are much more decisive than in the EU. From now on, we will observe the situation both in Europe and the USA. Due to the lack of concrete measures to stimulate the economy by the EU, the Euro is unlikely to grow. In the meantime, the U.S. is very slowly spinning the machine to stimulate the economy, which is also causing irreparable damage to many companies. The one who copes with the problems faster will win.


Bitcoin

While all countries are at war with the epidemic, it seems that investors are not at all concerned with cryptocurrencies. However, we can see that Bitcoin is holding up well above $6000, and at least not falling. There is a suspicion that because Bitcoin is generally not very dependent on some real sector of the economy, as well as because of the weakening of strict regulation, investors will want to take a chance and buy the cryptocurrency for certain amounts.


Oil

The price of Brent oil fell to $22 per barrel for the first time since March 2002. All our previous concerns are confirmed. There is little hope for any stabilization, as the prices for long-term contracts are beginning to level off. So far, oil has very little chance of recovery. Very much now depends on the concerted action of importers and exporters. Only new agreements between countries can stabilize the current oil situation.


What’s waiting for us today?

03.00 Manufacturing activity index in China for March
08.00 UK GDP
09.55 Change in the number of unemployed in Germany


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