It is now time to reflect on what the markets are appreciating. Do they not appreciate too aggressively a sense of fear in the situation?
In this case, there is reason to think of a deeper correction. They are more or less close to their old ones or to record new records as news of the virus comes out. But in terms of raw materials, and especially copper, how much is considered sufficient bleeding?
Copper is down nearly 12% from its peak earlier in January and has been in its worst series in six years.
If you are also wondering why kiwifruit, the Australian dollar and the Canadian dollar are suffering – they are commodity currencies and tied to commodities.
However, they do not think that the worst happened when talking about the aggressive unleashing of the coronavirus. But as the correction deepens, we must think that there is a fine line between assessing a justifiable risk and fear and assessing an absolute global pandemic.
All this will become clearer, of course, when we also have more information about the virus itself and over time. But remember that markets cannot always go in one direction forever.
Trader Martin Nikolov