A Sea of Red

A sea of red

European markets opened with a heavy weight on their collective shoulders Friday after the Dow Jones Index lost 4.4%, building up cumulative losses for this week that are beginning to resemble those in 2008.

The FTSE has dropped from 7,434 at the beginning of the week to 6,526 this morning, losing more than 12% in one week. British Airline parent IAG lost nearly 10% since the opening, closely followed by Scottish Mortgage Investment Trust and tour operator TUI.

The speed at which markets are declining is raising expectations that central banks will start stepping into the picture to try and soften the economic blow of the coronavirus, the Fed potentially being the first with the opportunity to cut rates as soon as next month.

Sterling perks up from yesterday’s loss

Amid all the coronavirus frenzy on the stock markets the focus has somewhat shifted away from Brexit, which is still corroding the pound, particularly after the government published its mandate for UK trade negotiators Thursday in which it rejected a number of EU demands. The mandate means that the UK could still end up with a no-deal Brexit. The pound is back above the $1.29 mark this morning, but only just.

Brent drops below $50

Declines in Brent crude have sped up over the last week as the coronavirus became far more active across the globe, making it far more difficult to estimate the eventual decline in demand not only in China but also in Europe and the US. Brent is now trading below $50, setting the stage for a fresh discussion on production cuts when OPEC meets in Vienna next week.

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.