Coronavirus woes sap market confidence

Markets lost their positive mood on Tuesday amid worsening coronavirus statistics. Over the previous day, the number of new cases exceeded 208K, the third-largest daily growth. Hopes for a flattening of the curve have not yet been met. However, the real trigger for the market sentiment was a jump in the number of deaths to 5.5K overnight, the highest in three weeks, of which almost 1000 were in the US (highest since June 9th). Such data diminish hopes that the recent increase in COVID-19 cases was due to broader testing. Additionally, the US reported today about 60K new coronavirus cases, a one-day record.

The deterioration of the situation has already led to the return of quarantine restrictions in Australia and several European countries. It is negative for the markets if death numbers continue to rise, governments may impose restrictions on movement like they did three months ago. Unsurprisingly, it may end in the same market reaction as we saw back then.

The FxPro Analyst Team