Daily summary: Global indices rebound on virus slowdown signs

• Stocks rebound on slowing outbreak
• Oil prices fall after OPEC postponed the meeting
• Gold extends gains

 

Global equity markets  have risen sharply on Monday due to the first signs of a slowdown in the number of new cases and deaths in the European countries which were mostly affected by the corornavirus pandemic, like Italy and Spain. Tomorrow finance ministers from the euro zone area will present several proposals for helping the economy affected by the spread of the coronawirus.

President Trump noted signs the coronavirus outbreak in the country is beginning to stabilize. The number of fatalities in New York state declined for the first time to 594 yesterday from 630 on Saturday.

On Monday DAX finished over 5% higher, CAC 40 gained 4.8% and FTSE 100 was up 3.1%. Indexes in the US are also trading in green. Dow Jones is up 5.68%, S&P 500 rose 5.69% and NASDAQ  is trading 5.49% higher.

 

At the same time, fears of a pandemic revival in Asia occured after the number of new coronavirus infections increased in China. Also Singapore and Japan announced they will go into lockdown for one month due to a sharp increase in number of infections.

 

Oil prices erased some of the Friday gains  after Saudi-Russian negotiations were rescheduled to Thursday even as the virus pandemic hurts oil demand. Investors are worried that the promised production cuts may not occur as President Trump's weekend meeting with the representatives of the US oil sector only caused a threat of tariffs against imported oil, not any signs of a production cuts in US  that Russia and Saudi Arabia are looking for. During today’s trading session WTI dropped  6.21 % and Brent lost 4.49%.

 

Gold prices went up again today, continuing a three-session rally due to the concerns regarding global recession and prolonged period of low interest rates. According to BMO analysts holdings increased last week by 1.5 million ounces and have risen 10% since the beginning of the year when it comes to claims for physical gold. The Central Bank of Russia has delayed the publication of weekly reserve data for the third day, which seems to be an attempt to cover the pressure on its foreign reserves when it tries to stabilize the ruble in the face of the ongoing oil price war. During today’s session gold went up 2% and silver gained 2.5%

Economic calendar for Tuesday is almost empty. RBA decision on interest rate is the main macroeconomic release scheduled for tomorrow. Investors will also get to know Ivey PMI Index from Canada. Therefore news regarding the spread of coronavirus should have the biggest impact on the markets.

EUR/USD - The pair failed to break below the key support area at 1.07769.  As long as the price trades within a range between  1.07769 and 1.0901, sideways trend looks more probable. On the other hand, breaking above any of these levels may lead to a bigger price movement. Source:xStation5

The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.