Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Coronavirus hopes propel stocks, euro higher

Stock MarketsApr 07, 2020 07:50AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
2/2 © Reuters. Passersby wearing protective face masks are reflected on a screen displaying stock prices outside a brokerage in Tokyo 2/2

By Marc Jones

LONDON (Reuters) - World stock markets enjoyed a second day of sharp gains on Tuesday as signs of progress against the coronavirus in both Europe and the United States and some more liberal helpings of stimulus kept investors charging back in.

There was an added boost from commodity markets as oil climbed nearly 2.5% on supply cut hopes, while currency markets also came alive as a tumbling dollar sent the euro racing out of a six-session rut of falls.

Equities were where the main action was however. Japan's Nikkei followed up Wall Street's 7% surge on Monday [nL1N2BU2BE ]with a 2% jump as its government promised a near $1 trillion stimulus package - equal to a fifth of its GDP.

Europe was in the swing of things too. The pan-European STOXX 600 index climbed roughly 3% as the respective markets in London, Frankfurt, Paris, Milan, and U.S. futures, all bounded higher.

"A day does not a trend make, a week does not a trend make... but we think the market is bottoming out," said Jeff Mortimer, Director of Investment Strategy at BNY Mellon Wealth Management.

"We are trying to get clients to understand that (in market performance terms) better times ahead can come more quickly then you expected."

Worldwide, the virus has infected more than 1.3 million people and killed over 74,000, and though the numbers are still rising in many highly-populated countries, some tentative improvements have given hope.

In hardest-hit Italy and Spain, authorities have started looking ahead to easing lockdowns after steady falls in fatality rates. In the United States too, the daily number of deaths in the country's worst-affected area, New York, has also shown signs of steadying.

With market optimism on the rise, the U.S. dollar, which has been soaking up safe-haven flows for weeks, slipped against most major currencies.

The euro shot up 0.8% to $1.0880 to snap a six-day run of falls, the pound climbed despite Britain's Prime Minister remaining in intensive care due to the virus, and the Australian dollar jumped over 1.5% to its highest in a week.

New Zealand's dollar rose 1.3% too, while the Japanese yen shook off an early dip to clamber up to 108.92 per U.S. dollar.

"We've got a nice decline in volatility across forex and equity markets. We know central banks have done a very good job in alleviating the strain in dollar markets and that's feeding through," said Kenneth Broux, FX strategist at Societe Generale (PA:SOGN).

"We need some time for this to settle ... I think what we are seeing is a bit of mean reversion - a correction from exaggerated selling. We are in that process."

Graphic - Global stock markets shaking off the virus:


It wasn't only oil driving commodities markets higher either, copper punched up to a 3-week high with a 3% gain for industrial metals, while safe-haven gold wilted to $1,655 an troy ounce in the other direction.

Benchmark 10-year U.S. Treasuries and German Bunds continued to lose out too. U.S. yields - which move inverse to price - rose to 0.73% having fallen almost 9 basis points on Monday, and Bund yields were up 6-9 basis points across the curve. [US/]

Rating agency Fitch had warned on Monday that it was likely to make some multi-notch cuts to some countries' credit scores due to the financial pressures heaped on by either tackling the virus, the collapse in oil prices, or both.

The Eurogroup of finance ministers within the single euro zone currency bloc are scheduled to meet later on Tuesday, and analysts expect more joint action to help prop up the economies of member states.

Cyprus, one of the lower-rated countries in the bloc, is marketing a seven-year and 30-year bond issuance. In Asia, Indonesia issued a 50-year bond, the longest ever timeframe in the region.

"Investors have recently been detecting growing public support for the concept of coronabonds in European Commission and ECB circles," said DZ Bank analyst Daniel Lenz, adding that German ECB Executive Board member Isabel Schnabel was among those who appeared to voice support.

Graphic - Coronavrus impact on global markets:

Coronavirus hopes propel stocks, euro higher

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
john richards
john richards Apr 06, 2020 10:29PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Will be more short squeeze like the minutes of trading here today.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email