Market News & Analysis
Europe closes borders
Fiona Cincotta March 16, 2020 6:18 PM
The coronavirus spread across Europe is intensifying and countries are moving into uncharted territory in terms of economies and businesses as European borders are closing, schools are shutting down and most large gatherings are being cancelled.
The FTSE is trading down almost 7% this morning while the EuroStoxx lost 8.8%, reflecting the overall fall of dominoes in the European markets. To try and gauge which way the markets will jump, the number of new cases is not painting the full picture.
Markets focusing on cross-border communication
It is now more about which travel routes remain open, which borders still allow flow and which businesses are still operational. Over the weekend the countries with only a small number of cases like Poland, Denmark and the Czech Republic closed their borders with Germany where the numbers are rising, while Spain shut itself off after it become Europe’s second worst hit country after Italy.
The number of cases in Switzerland is rising fast, possibly because of proximity to Italy, and Austria and the Scandinavian countries are also struggling to contain the virus.
The losses in the travel industry have moved onto another level with TUI dropping 35% and easyJet declining 29% as investors call into question whether these companies will be able to last the duration of the coronavirus. In the black is only Reckitt Benckiser, the producer of antiseptic Dettol, immunity supplement Airborne and bleach cleaner Harpic.
Fed cuts interest rates to zero
The Fed’s decision last night to cut interest rates to zero to help the US economy ride through the crisis now feels like a small barrier in the way of the tidal wave that is coming. The dollar is the only currency pulling in investors and sterling is trading at $1.23.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.
Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.