Daily summary: Market sell-off continues

7:33 PM September 21, 2020

  • Sell-off on global financial markets

  • Silver craters over 9%

  • U.S. dollar as “the winner” of the day

Global financial markets started the week amid continued coronavirus fears due to potential U.K. lockdown measures, which might have fuelled today’s rout. Banks were among top laggards as a report concerning suspicious transactions was released. The report suggests that some major banks might have been involved in money-laundering or other illegal activities. European stocks fell the most in over three months - DAX finished the day 4.37% lower while CAC 40 plunged 3.74%. 

U.S. indices started the day in a pessimistic moods as well with tech stocks being the most resilient (Nasdaq is down around 1% at press time while S&P 500 is trading almost 2.50% lower). As today’s sell-off is widespread and affects various asset classes, precious metals plunge too. Gold prices tested $1,900 mark today and they seesaw around this crucial barrier now. The biggest declines might be spotted on silver markets as silver spot price craters over 9%. The U.S. dollar re-emerged as a haven currency with EURUSD gradually approaching the 1.1725 level. It is worth mentioning that despite higher volatility (VIX is up 11%), the U.S. bond market is barely moving. Ten-year Treasury yields remain in a range from 60 bps to 75 bps, which indicates that there is no evident fear in fixed income. 

Tomorrow the RBNZ will release its rate statement while the Riksbank will announce its interest decision. At 3 pm BST the U.S will publish existing home sales data, which might give some insight into the country’s economic recovery. Apart from that, one might be particularly interested in several FOMC members speeches - Kaplan and Williams will speak at 11 pm BST today while Fed’s Chairman is supposed to start his speech at 3:30 pm BST tomorrow. 

Silver plunges almost 10% today. One might view the $23.4 mark as the nearest support. Bulls did manage to regain control in this area twice following recent price surge. Source: xStation5

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