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Mixed session in Europe following last week’s dramatic sell-off
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US stocks try to recover
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Shocking figures from the Chinese economy
The coronavirus impact still plays the dominant role on financial markets as the panic won’t let up. According to WHO, as of Sunday there have been 1739 new cases meaning that the total number of infected stands at 87,137. These days the pace of the outbreak is significantly higher outside of China - countries that struggle the most are South Korea (3736 cases), Italy (1128 cases) and Iran (593 cases). The fact that the outbreak became the global one is crucial for the financial markets as investors have been trying to assess the potential hit to the global economy.
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Open account Try demo Download mobile app Download mobile appFollowing last week’s dramatic sell-off, one may observe mixed feelings on stock markets today. Even though the Asian indices managed to rebound (Shanghai Composite rose a staggering 3,15%), European equities did not perform rather mixed. As a matter fact, DE30 fell 0.27% and FTSE MIB plunged 1.50%. Other major indices indicated either modest increase or minor decline. American stocks were set to open lower today, yet they managed to rebound. Currently S&P 500, Dow Jones and NASDAQ are trading roughly 3% higher.
As mentioned above, investors are very eager for exact coronavirus figures in terms of economic impact. At first, one could hope that the economic recovery might be a V-shaped one. However, it is not that certain anymore amid the rapid pace of new cases beyond China. In fact, investors got to know the first official economic data illustrating the virus impact. The China Manufacturing PMI plunged to 35.7 while the China Non-Manufacturing PMI stood at 29.6 points!
As far as today’s economic data is concerned, the day was dominated by PMIs releases. The German Manufacturing PMI showed 48 points (est. 47.8), which is a better result than in February (45.3). The U.K. Manufacturing turned out to be even better as it grew to 51.7 points compared with 50.0 points in February. On the other hand, the ISM Manufacturing PMI in the U.S. stood at 50.1 - slightly below market expectations (est. 50.5). Bearing in mind the potential coronavirus hit, all these figures do not seem catastrophic yet.
EUR/USD is trading higher today (+1.25%) as it managed to break above the 1.11 resistance level. The commodities tend to rise as oil prices are soaring roughly 5%. After last week’s sell-off both gold and silver prices are trading higher too.
Tomorrow one should particularly pay attention to RBA’s interest rate decision and its rate statement. One might also be interested in the U.K. Construction PMI as well as CPI release from the eurozone. Apart from that, Switzerland will publish its GDP figures for Q4 2019.
EUR/USD is trading higher today (+1.25%) as it managed to break above the 1.11 resistance level. Amid this rapid upward move, the currency pair now seems to approach the 1.119 level. Source: xStation5
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