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The global stock markets on Monday were revived by the news about the reduction in the number of deaths from coronavirus in Europe and the United States, as well as due to some stabilization of the number of cases.
As we have repeatedly pointed out, any news that the spread of the coronavirus pandemic in the World, especially in America and Europe will begin to slow down will be the green signal for investors to buy shares in companies. On Monday, amid news of the slowdown in the spread of this pandemic in New York, investors stepped up and acquired shares of American companies. In Europe, the same pattern was observed. In the wake of already reported declines in the number of cases in France and Italy, the European stock indexes surged.
On the other hand, the commodity market receives support for quotes of oil and industrial metals, which, on the one hand, is due to positive news on the topic of COVID-19, and on the other hand, reports that there are no more cases of this coronavirus in China, as well as news about the fact that Chinese industry has stepped up and is increasing production growth.
The currency market is stagnating. After the weakening of the US dollar last week, the current one shows its ambiguous dynamics. It is rising against the yen, primarily in the wake of the decision of the Japanese government to introduce incentives to support the economy in the amount of $ 1 trillion, as well as strict quarantine measures. But in relation to other major currencies, this is due, as we have repeatedly mentioned before, to the introduction of unprecedented measures to support the American economy by the Federal Reserve and the Ministry of Finance, as well as extensive provision of dollar liquidity by the regulator, which, if tensions on the subject of coronavirus are reduced, puts pressure on the dollar exchange rate.
Given the signals of a change in sentiment in the financial markets, we believe that the dollar will continue to decline smoothly against major currencies, unless negative news on the subject of COVID-19 flows onto the market again.
Forecast of the day:
The AUD/USD pair is increasing in the wake of the recovery of the Chinese economy and the reduction of tension around the theme of coronavirus. We believe that it is necessary to buy a pair after breaking through the level of 0.6185 with a local target of 0.6280.
The USD/CAD pair is declining on the wave of the weakness of the US dollar and the continuing hope that a new deal will still be concluded to regulate the volume of crude oil production between the USA and Saudi. We believe that it is necessary to sell a pair with local targets 1.4000 and 1.3920.
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