We have a moderate risk of sentiment on the last day of the week. Despite the increasing number in Hubei of the infected to 51 986, the mortality and worldwide spread of the virus is slowing. Today, China is expected to cut tariffs on part of US goods, as agreed by the Phase I deal. The Fed is reducing REPO operations at a higher than expected rate.
European index futures point to a start in positive territory, with both European and US futures registering new peaks last night.
A green start for Europe is coming, but cautious. Market players are still closely monitoring the development of the virus, but also the Fed’s actions with overnight operations.
The yen is the leading currency on the FX front, up 0.18% from its earlier low. The clear medium-term ranks in safe haven assets, oil and gold indicate that uncertainty is dominant. The Swiss Franc, on the other hand, is the least performing safe currency with a decrease of 0.11%. Investors seem to prefer more USD as a haven, so the euro and franc are cheaper.
WTI is trying to hold over $ 51. Bitcoin failed to beat $ 10,400, but holding it above $ 10,000 is still bullish.
Today the economic calendar is loaded with GDP data for Europe, later for the USA – industrial production.
On a typical Friday, we will expect a withdrawal from risky assets. Economic data will also be in focus. However, the virus, the Fed, and tariffs are more likely to outperform investors from a fundamental point of view.
Trader Martin Nikolov