On Tuesday, there was some positive news about the fight against coronavirus in the European Union. If the doctors manage to stabilize the situation, the number of first infections will probably decrease soon.
Chart of the Day – DAX
What do we see in the markets? Already on Tuesday, net sales in the European markets switched places with buying. Due to support measures and excess of cheap liquidity, investors began to buy back shares of large companies. Many believe that the shares of giants were unfairly sold out. The DAX index on Tuesday rose by a record 11%.
On Tuesday, the main data on business activity in the European Union were released. And the results are disappointing. The Business Activity Index in France was at its lowest level since it was calculated, while the German index fell to 34.5, which is 11 points below the forecast, and indices of Italy were not published at all. The Euro, like the stock market, is trying to buy back, but there is probably a period of high volatility due to the great uncertainty in the markets. The euro rate will now move from any information on the coronavirus and on measures taken by the government to stabilize the economic situation.
The gold is on the top. On Tuesday, the price per ounce adds more than 6% and passed the $1600 mark without any problems. As we expected, the gold will be entered by large investors who do not want to make any actions with the unstable stock market, as well as do not want to hold the currency, as it is likely that due to huge financial assistance from national banks, the currency will become cheaper. Once again, the level of $1700 is much closer than a week ago and at this rate gold may try to break through it very soon.
The Canadian dollar has fallen completely against the U.S. dollar and is at almost 15-year lows. The USDCAD pair traded at 1.45 on Tuesday. The low oil price, rising unemployment due to coronavirus outbreak, had a very negative impact on the currency. Also real estate sales fell by 4.4%, which added negative for investors. In general, investors and traders will have to get used to the disappointing data because it is unlikely that the current situation will improve in the next weeks.
What’s waiting for us today?
08.00 UK Consumer Price Index
13.30 IFO business climate index in Germany for March
15.30 US crude oil reserves
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