Monex: Markten maken zich zorgen over eventuele tweede coronagolf

Monex: Markten maken zich zorgen over eventuele tweede coronagolf

12 mei 2020

Valuta
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Hieronder volgt een commentaar in het Engels van Ranko Berich, Head of Research bij Monex Europe op de Amerikaanse dollar, euro en het Britse pond.

EUR
The euro gradually weakened against the dollar yesterday as risk appetite reversed and renewed safe haven flow was sparked. This morning, the euro edged higher, and attention remains on the reopening of economies. France and Italy reported the fewest coronavirus deaths since March, but concerns over a second wave of infections saw European stocks trade lower on Monday. The German Constitutional Court ruling still poses a major downside risk to the euro but no news on the ECB’s response has been announced yet. Today is a calm day on the economic calendar for the eurozone and the EURUSD pair remains in the clutches of US CPI figures later today, while Greek central bank head Yannis Stournaras will participate in an online debate at 17:30 BST where he will address the German Court’s decision.

 

USD
The dollar opened the week with a weak spot yesterday, as risk appetite seemed adequate, but then began to rally in the mid-morning, ultimately closing the day higher against all of the G10 group of currencies. Some currencies such as JPY and EUR managed to regain some momentum overnight. Equities closed higher in the US, despite ongoing concerns about poor corporate earnings. Senior Federal Reserve policymakers Raphael Bostic and Charles Evans both made comments suggesting they were opposed to or did not anticipate negative interest rates in the US, ahead of a major speech from Fed Chair Jerome Powell tomorrow that may touch on the subject. The Fed also confirmed the start of asset purchases by the Secondary Market Corporate Credit Facility, which will begin to buy assets including exchange-traded funds today. The release said that the “preponderance” of holdings will be of investment grade corporate debt, with the remainder in higher yielding, non-investment grade debt.

 

GBP
Like many of its peers sterling traded lower against the US dollar yesterday, as the Government offered more details on its plan to re-open parts of the economy. The phased plan in essence prioritised the allocation of increased contacts to workers unable to work from home, and schoolchildren. A number of senior ministers will set out further details on the Prime Ministers “baby steps” plan today after Johnson’s speech received widespread backlash due to its lack of clarity. Health Secretary Matt Hancock is set to do the broadcast rounds this morning to clear up some of the communication errors, while Transport Secretary Grant Shapps will lay out how to get to work safely in the age of corona. Elsewhere this morning, Bank of England Deputy Governor Ben Broadbent spoke to CNBC, and hinted that the Bank’s long held position against negative rates was not likely to change, saying that if rates were too low they risked doing more harm than good. Later today, Chancellor Rishi Sunak will also appear in the House of Commons where he is expected to unveil plans for winding down the wage support scheme which is currently paid out to millions of furloughed workers.

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