the economic consequences of The Coronavirus epidemic and the collapse of the oil price to put the stock exchanges of the week to kick off hard. The Oil price collapse Stokes fears of a bankruptcy wave in the US Oil industry. Together with the uncertainty about the economic consequences of the Coronavirus epidemic, this is a brockt the stock markets, hefty losses.
Europe’s stock markets lose part far in excess of 7 percent. Relatively well the Swiss stock exchange with a decline of 5.55 per cent. The German DAX is 7.9 percent, and even worse it hit the stock markets in Norway and Austria.
Panic sales
The downturn has accelerated compared to the last two weeks even, so that many of the market participants with reference to the worldwide spreading of Virus from the “Corona-Crash”.
The trading day in any case likely to be remembered as a black Monday in the books, it was said in the trading circles. Part of the speech was not of panic sales. “The fear of a global recession sits the investors currently deep in the neck. And the sharp fall in Oil prices has offset the markets are finally in a panic,” said a dealer.
the fear barometer rises
The extreme nervousness was also reflected on the anxiety barometer, VSMI, the phase soared by almost 30 percent in the height and now with 43 points, the highest level since the financial crisis over 10 years ago listed. The global slump in share prices on Monday, reminded strongly of the dark moments of the financial crisis of 2008, said a dealer.
The shares of the big banks, UBS and Credit Suisse dropping below 9 francs. As a reason for the low interest rates are called: depth, yields also mean less revenue for the financial institutions. In addition, it was feared that an increasing number of companies are due to the consequences of the spread of the Coronavirus in the trouble and problems in the repayment of their loans could have.
trading stop in the USA
The Dow Jones started on Monday with an opening loss of 7.1 percent. The largest slide is for ten years. Shortly after the Start of the trade has been stopped automatically, because the losses exceeded a certain threshold.
Previously announced by the U.S. Federal reserve Bank, to intensify their Relief efforts. Nearly a week after a reduction in interest rates, they increased their cash injections to the financial system. As the regional Fed of New York announced on Monday, is increasing the volume of their overnight transactions with the banks from 100 billion to 150 billion US dollars. This means that the banks get more money for a day.
Trump advises Americans to benefit from the Oil price Crash
U.S. President Donald Trump makes the dispute between the oil producers Russia and Saudi Arabia for the crash of the US stock exchanges responsible. Another reason for the sharp fall in the stock prices of unspecified “Fake News were,” said Trump on Monday on Twitter.
From the slump in Oil prices, Americans could benefit sometimes: “Good for the consumer is that gasoline prices are going down!” To the Coronavirus epidemic, he wrote: “Nothing is closed, the life and the economy go further.” Every year, between 27’000 and 70’000 Americans would die of the ordinary flu. Currently, there are 546 confirmed Corona cases and 22 Deaths. “Think about it.”
“hope in vain”
“are to be changed on Monday morning, the financial markets in the panic mode,” said Milan Cutkovic, a market analyst at the brokerage firm Axitrader. “The magnitude of the collapse shows that any hope of a temporary respite was in vain,” said the currency strategist Sean Callow of Westpac on Monday.
you can also read the Economists-Interview with the black Monday: “Now, more shocks to come together” Why a fall in share prices today? And this is the end of the ten-year growth phase? Christian Gattiker, chief strategist at Julius Baer, explains.
In the course of the weekend, the news have shown for the Coronavirus that it is expanding more and more, and thus the economic consequences, is becoming more and more difficult. In the particularly strongly affected Italy, whole regions and cities are on lockdown in the North.
in Brussels, the nervousness is palpable. The European Union wants to cushion the effects of Coronavirus on the economy in the EU is extensive. “We check everything we can do, the impact on the economy to counteract,” said EU Commission President Ursula von der Leyen on Monday.
Crash in the Oil market
The weekend started the oil price war between Saudi Arabia and Russia, the prices for the main varieties had a break of about 30 percent (of the article).
On the foreign exchange market, investors rely on safe havens: The Swiss franc and the Japanese Yen increased. The Euro fell about to the Swiss franc on Monday morning in 1,0551 francs, a level last reached in the summer of 2015. The US Dollar was 0,9252 francs to more than a cent below its Friday night. Briefly, he had fallen in early trade, up to 0,9183 francs. Was asked in this environment, the Euro. Against the US Dollar rose on Monday in early trading, at times to the highest level in over a year. So he went intermittently for 1,1495 dollars on the table, moved lower for the reporting period, but 1,1405 dollars again clearly.
the currencies of countries that are heavily oil-dependent, came under pressure. So, the Norwegian Krone, the canadian Dollar, but the US Dollar also fell.
“Coronavirus plunges the world economy into recession,”
The Investment Advisory firm Sentix reported on Monday the unprecedented collapse of your barometer within one month in all regions of the world. The global economy-the overall index fell in March from plus to 8.1 meters to minus 12 points.
Never before has such a powerful synchronized downturn the world has been economic recovery in the Sentix data is measurable, so Sentix managing Director Manfred Hübner. “The current downturn is part of a disgraceful chain: Lehman (2008), Fukushima (2011) and the Oil credit crisis (2016),” said Sentix.
escape to Gold
the price of gold rose. The precious metal rose to more than $ 1700 per Troy ounce. This was the highest level since December 2012.
investors fled from equities and into safe-haven government bonds. In countries such as Germany and the Netherlands, yields significantly. The yield on ten-year German bonds fell by 0.13 percentage points to minus 0,846 percent. Particularly strong are the prices of US bonds. Already on Friday the U.S. government securities had increased significantly. In particular, bonds with a long maturity, continued to grow strongly. In contrast, the Italian state sold bonds at the beginning of the week massively. Here, the yield increased on ten-year government bonds by 0.22 percentage points to 1.29 percent.
investors in the money market speculate, meanwhile, on two interest rate cuts by the ECB until the beginning of June. The courses on Monday showed that investors expect now 100 percent that the European Central Bank up to then, their so-called Deposit rate in two steps to together to 0.20 percentage points to minus 0.70 per cent.
The issue: A six-fold Giftmix for the world economy Increasingly the talk is of an impending recession due to the Coronavirus. The world was also ready earlier. Dangerous this time is that a whole series of factors come together.
(cpm/sda/reuters)
Created: 09.03.2020, 09:07 PM
