- DAX, Nasdaq and S&P 500 paint fresh record highs
- CAD plunges after BoC decision
- OIL trades under pressure on demand concerns
Sentiment on the global stock markets has greatly improved since yesterday after Chinese authorities outlined how they aim to tackle spreading of deadly coronavirus. Stocks in Asia booked solid gains today with HSCEI (CHNComp) jumping over 1.8%. Equity indices from the Western Europe also saw a strong opening with DAX (DE30) surpassing record high from January 2018. However, those gains were later erased and European indices traded under pressure until the opening of Wall Street session. US indices played down virus outbreak concerns and surged to fresh record highs at the opening. European benchmarks followed suit and started to recover.
DE30 reached new ATH at 13635 pts at the beginning of today’s session but failed to hold onto these gains. The German index pulled back to the support at 13530 pts. Source: xStation5
There was little action at the World Economic Forum in Davos today. Donald Trump once again attacked the Fed for mismanagement of interest rates, while other US officials hailed the trade deal with China. One point of note was Trump’s comments on EU car tariffs - the US President said that he has a date on his mind when such tariffs could be introduced and that “it is a fairly quick date”.
Tesla (TSLA.US) once again gathers attention. The electric car manufacturer continues to surge and has surpassed market capitalization of $100 billion at the opening of today’s session. The US carmaker is now bigger than any German automotive stock.
GBP is the top performing G10 currency today thanks to a major improvement in soft indicators, especially business optimism. Market odds for the BoE rate cut next week slipped below 50%. On the other side of the table we have today’s G10 top laggard - CAD. Canadian dollar plunged following the Bank of Canada decision. While the Bank left rates unchanged as expected, it has hit a more cautious tone and lowered growth forecast for the first quarter of 2020.
Oil is one of the assets that failed to look past coronavirus concerns today. Crude price declines after some major banks hinted that virus outbreak may limit interest in plane travel and, in turn, hit demand for oil. Brent (OIL) and WTI (OIL.WTI) trade around 2% lower on the day.
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