After the European market open, the US Oil was trading above $30 level. With the recent collapse of the stock market and the “oil price war” led by Saudi Arabia, selling pressure of the oil prices was not as strong as expected. Many central banks, governments and international organizations have jointly launched stimulus policies, which will have a certain stabilizing effect on the oil market, lead to consolidation.
As a safe-haven traditionally, gold fell for several trading days already, even the new coronavirus pandemic caused a big drop in global stock markets. It is reported that investors sold their gold holdings to cover cash losses incurred elsewhere.
It is a “Black Monday” for the US stock market again, triggering the fourth market halt in history! The three major Wall Street indexes closed down sharply, of which the S & P 500 index fell about 12%, the biggest drop since “Black Monday” 30 years ago.
At present, most of the analysis believes that the Fed’s policy can only alleviate the market liquidity issue, but it does not have much real effect on the risk of recession caused by epidemic factors. The market reaction on Monday hinted that investors were more worried rather than more confident. Regardless, participants in the market will still digest the Fed’s latest “big” move.
Before the market open this week, the Federal Reserve significantly reduced the fed fund rate from the target range of 1% – 1.25% to 0% – 0.25%, and also announced the implementation of quantitative easing (QE) on the scale of US $700 billion. The market sentiment has improved for a short time, but is still pessimistic. At the current European session, global stock markets are still gloomy.
Before the market open today, the Federal Reserve suddenly further cut the interest rate by 100 basis points. Australia, New Zealand and Japan also announce the stimulus plan together, in order to deal with the impact of the global epidemic, stimulate the frozen economy. However, market concerns have not eased and selling pressure continues. At present, the Dow futures are still falling around 1000 points. Oil prices remained sluggish, and US oil fell to the $30 level.
Even though the European Central Bank did not cut interest rates by 10 basis points, it did not have much support for the euro, and even some investors were disappointed that they were bearish on the economic outlook of the euro zone. It would be a negative factor to euro. The Dollar index hit the high at 98.31 last night.
Market sentiment began to improve. The three major US stock index futures stop further dropping, and they are currently bounce back more than 3%. Earlier, it was reported that Pelosi, the speaker of the US House of Representatives, was close to reaching an agreement with the Trump government that introducing measures to mitigate the economic impact of the new coronavirus epidemic.
Countries over the world continue to do everything possible to assure the market. The Federal Reserve announced last night that it will inject 1.5 trillion US dollars of the short-term funds into the market. However, the measures is not likely to boost investor confidence that much.
The pneumonia epidemic of the new coronavirus has raged in more than 100 countries around the world, and more than 120,000 people have infected, causing huge economic losses. Besides China, Italy, Iran and South Korea have had severe outbreaks. The recent rebound in oil prices has lost the momentum. US oil (WTI) today plunged to the $ 31 mark in the Asian seesion.