News about: Stock market, Coronavirus, The oil price
The further spread of coronavirus around the world caused investors to flee risky assets and led to increased demand for safe-haven assets. The number of confirmed cases of coronavirus exceeded 110 thousand, and the number of deaths is close to 3900. Moreover, the epidemic has already spread to more than 100 countries.
On Tuesday, the Fed decided to cut interest rate from 1.75% to 1.25% in an emergency move in response to the risks of the global economic slowdown due to the spread of coronavirus. This decision caused the dollar to plunge but provided only short-term support to the stock market.
US stock market indices were in the phase of upward correction in the first half of the week, boosted by the Fed decision to cut interest rate, as well as by the results of the Democratic Party primaries in 14 states, which took place on Tuesday and by the result of which Joseph Biden won in 9 out of 14 states, stepping forward ahead of the “democratic socialist” Sanders in the race for the right to run for president.
The oil price fell to a 3.5-year low on Friday after Saudi Arabia and Russia failed to reach an agreement under OPEC +. Oil production cuts expire on March 31. Saudi Arabia stated that it was ready to increase production to a record 12 million barrels per day, which would lead to a significant surplus of oil in the market, taking into account decreased demand due to the spread of coronavirus.
Main events of the week:
- On Tuesday, Governor of the Reserve Bank of New Zealand Adrian Orr will speak.
- On Wednesday, GDP and industrial production in the UK will be presented, as well as data on consumer price index and crude oil inventories in the USA. Adidas will present quarterly earnings report before market open.
- On Thursday, ECB meeting will be held, at which a decision can be made to cut the interest rate. Also, data on the producer price index in the USA will be presented.