Before taking a break from the coronavirus news, the markets were again in panic on Thursday. In the USA there were first victims in California, though before that all the dead were only in Washington. Now markets are evaluating the economic risks they will have to take during the epidemic, so the volatility of major indices has increased. The US government is allocating $8 billion to fight the epidemic and hopes to overcome it in the near future.
USD/CHF chart of the day
Actually, the situation is more complicated than it looks. The leading countries are trying to figure out what kind of losses they will incur in different scenarios. The ECB has asked banks for a possible work plan in case of an epidemic. U.S. analysts are calculating different options and have patience. As much as we would like, the markets are about to ” storm “. On Thursday, S&P500 and DOW fell by 3%, DAX lost just over 1.5%. The current situation does not even give an opportunity to predict the movement somehow, so we just have to observe the development of the situation.
The Swiss pound shows good dynamics. On Thursday, it broke a very important level of 0.9530 and rushed lower. These are the lowest values since March 2018. The dollar is getting weaker against all currencies, but against the franc it is getting better. Switzerland has almost no problems at the moment. Investors rushed to buy up the franc in order to wait for hard times and save their assets. Breakthrough of the level 0.9530 opens the way to the lows of January 2018 at 0.9270.
Traders waiting for OPEC’s decision. On Thursday Brent oil was traded at $50 per barrel. Another news for the oil was the agreement between the president of Russia and Turkey on a ceasefire in Syria. The fewer threats in the East, the cheaper oil is. OPEC meeting will continue on Friday. Oil production has to be reduced, because economic stagnation, reduced air travel and the shutdown of some production facilities around the world are reducing the demand for oil. If this decision is not made, we will see new lows.
For gold, our predictions are confirmed, and we see another jump to $1700 an ounce. The gold looks very strong. It is very likely that next week we will see an attempt to take this level.
What is waiting for us today?
01.30 Australia’s January retail sales volume
11.00 Volume of production orders in Germany
14.30 USD Change in Non-farm Payrolls for February
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