Light at the end of the tunnel

Even though the coronavirus is still in full flow in Europe some of its weight is beginning to lift off the markets as the light at the end of the tunnel is getting closer.

Charts (2)

Even though the coronavirus is still in full flow in Europe some of its weight is beginning to lift off the markets as the light at the end of the tunnel is getting closer. Details of how the UK may go about reopening businesses and shops have already been leaked over the weekend and more details are likely to be thrashed out when Boris Johnson and opposition leader Sir Keir Starmer meet this week to discuss how to end the lockdown.

The FTSE rallied nearly 1.5% on opening, echoing similar moves on other European bourses. Some of the bounces in London, such as Glencore’s  5.8% jump and Anglo American’s 4.6% rally had to do with a temporary easing of concerns over US-China relations. The threat of new trade tariffs and a frosting up of Sino-US relations hit the mining sector particularly badly earlier this week because of China’s role as the world’s largest metals buyer.

Rising trade tensions also channelled some of the investment flows back into gold, one of the safe havens of choice for the moment. With all of the central banks’ easing and financing programmes, currencies are bound to weaken over the coming months, leaving gold as one of the most stable currencies out there at present.

Russian COVID numbers jump over the last three days

The number of new cases in Russia has risen by 10,000 for each of the last three days, nudging the country up the list of European countries with the most infections. The country is already in a lockdown and has closed its borders but a prolonged and heavy coronavirus exposure could affect some of its exports such as specialty metals supplied to car manufacturers and specialty tool makers.

Build your confidence risk free

More from Indices

Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.