The banks don’t have time to think

By 06/03/2020News
Morning Stock News

Gold   1679,84
(+0,47%)

EURUSD   1,1234
( +0,03%)

DJIA   25744,50
(-1,23%)

OIL.WTI  45,31
(-1,46%)

DAX   11784,25
(+ 0,01%)

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.


SWISS Franc

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.


OIL

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.


GOLD

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


Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.