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16.10.202011:45 Forex Analysis & Reviews: US stocks declined while Asia moved multidirectional

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Exchange Rates 16.10.2020 analysis

The U.S. stock exchanges sank on Thursday following the results of the trading session. The negative was triggered mainly by the failure of the government to establish an agreement on the assistance package. In addition, investors are gravely concerned about the growing cases of COVID-19 globally and particularly in Europe. Some countries have even begun to impose a state of emergency, which only worsens the mood of market participants.

The high level of volatility will continue for at least the next few weeks, as the uncertainty in the market continues under the influence of some fundamental factors. Particularly, the deadline for the release of the coronavirus vaccine, the ratification of the new fiscal package, the election race, and the US presidential election itself.

An active struggle is underway with some difficulties, but it has not yet been crowned with success. Thus, the current US leader Donald Trump and Treasury Secretary Steven Mnuchin are actively campaigning for the government to take stimulus measures. Nevertheless, it will most likely not be possible to do this before the start of the elections.

However, the rapid growth of COVID-19 can no longer be ignored by market participants. Investors are particularly afraid of restrictions imposed on European countries. Of course, in the light of the rapid spread of the second wave of the pandemic, it was clear that quarantine could not be avoided, but market participants until recently preferred not to pay attention to this.

The outbreak in France, for example, has already exceeded the daily record of 30,000 cases. In this regard, the government of the country had no choice but to announce the introduction of more stringent restrictive measures. They have particularly implemented a curfew.

Statistics on the growth of the country's economy are also important for market participants. They continue to closely monitor all publications of companies' financial reports, as well as official statistics from the government.

On Thursday, a sharp and unexpected increase in the weekly jobless claims were recorded. The number of first-time American citizens has increased by 53,000. Thus, the total number of applications submitted was 898,000 units. The initial estimates expected that it would not exceed to 825,000 units.

The Dow Jones Industrial Average closed Thursday's trading with a fall of 0.07% or 19.8 points, which moved it to 28,494.20 points.

The S&P 500 index was down 0.15% or 5.33 points, which sent it to 3,483.34 points.

The NASDAQ Composite index parted with 0.47% or 54.86 points, which moved it to 11,713. 87 points.

Meanwhile, the major stock indexes in the Asian stock exchanges moved multidirectional Friday morning. The factors that put pressure on U.S. markets are also causing concern among Asian investors.

Japan's Nikkei 225 Index dropped 0.3%.

China's Shanghai Composite Index, on the other hand, rose slightly by 0.1%. The Hong Kong Hang Seng Index followed suit and added 0.9%.

South Korea's KOSPI index sank 1%. Investors were in for an unpleasant surprise in the form of an increase in the unemployment rate of about 3.9% in the first month of autumn, while the previous data reflected an increase of 3.2%. This was evidence of the acceleration of inflation in the country. The number of unemployed citizens increased by 197,000 and reached 1.088 million, which is also a rather negative factor.

Australia's S&P / ASX 200 parted 0.5%.

Eseguito da Maria Shablon
Esperto analista di InstaForex
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