Black seat for bags. The surge in infections and the fear of new lockdowns to curb the second wave of the Cornoavirus epidemic have sent European lists to the mat. Already in the first part of the day, the main indices fell to the lows of last June with losses above 3% and few stocks with the plus sign. In the early afternoon, the heavy opening in New York, with the Nasdaq losing nearly 3% at the start while the S&P 500 and Dow Jones are in the red by more than 2%, accelerated the collapse in Europe. Thus, just before 15.30, Piazza Affari loses 3.3% with the FtseMib, the Dax in Frankfurt is close to losses of 4% as well as the Cac40 in Paris.
In the climate of high volatility, the Vix, the so-called fear index, jumped to the highs of June, in the area of 38 points and therefore close to the psychological threshold of 40 points. Global markets thus seem to have returned to last March, that is to say in the midst of the sales that were then moved by the first leap of infections from Covid. Today, as then, traders sell the most risky assets (stocks and peripheral bonds) to focus on safe havens such as German Bund, Yen and Dollar.
Meanwhile, eyes are on tonight. French President Emmanuel Macron will speak to the nation and operators fear that he may announce a light, one-month lockdown. France imposed a curfew in major cities two weeks ago from 9.00pm to 6.00am.
Spreads up and gold down
In the midst of sales on the price lists, the rise in the spread between BTP and German Bund also resumes. The differential marks 138 points against 132 at yesterday’s closing. The yield of the Italian ten-year is equal to 0.77%, from 0.68% yesterday. The euro dollar exchange rate moved to 1.1728, down for the fourth consecutive day. In this scenario of renewed tensions, the dollar returns as a safe haven for capital fleeing the Eurozone. Gold also lost ground, falling by 1.60% to 1,876 dollars an ounce. Just like in March, the yellow metal appears to have lost its status as a “safe haven”. The sharp decline in oil also weighs on the already difficult scenario, with Brent crude dropping by 5% to 39.14 dollars a barrel.
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