The situation in the financial markets is stabilizing, but is seen as only a temporary phenomenon, since most countries still cannot control the spread of the virus. Currently, Europe and the United States are forced to keep the population at home, thereby putting added pressure on their own economies which results in an overall weakness in the global economy.
Currently, main topic is the intention of the US government to allocate about $ 2 trillion to save the economy. This stimulus package provides for business financing, as well as direct financial assistance to the population. According to data published by Reuters in the United States, about 100 million people are forced to stay at home due to quarantine, which is almost a third of the total population.
Pay attention to the US stock market, most of the shares returned to the green zone, since the allocation of interest-free loans will allow companies to significantly improve the current state of affairs, including restructuring their financial obligations, as well as redeeming their own shares at lower prices (at a market price that is currently significantly below the average for the last 12 months).
At the same time, I will draw your attention to the weakening of the US dollar, which has occurred over the last few days against most currencies. So, for example, the GBP / USD currency pair has already overcome the technical resistance area 1.1880–1.1900, thereby opening the way to the psychological and at the same time technical resistance level 1.2000.
I also draw attention to the publication of a weaker than expected report regarding business conditions, as well as the current situation and economic expectations in Germany from IFO. Despite data coming in below expectations, the demand for the EUR / USD pair remains stable which probably has more to do with USD weakness. Nevertheless, active purchases of EUR / USD should remain subdued until the signing of the bill to provide financial assistance in the United States, which is likely to exert strong, but short-term pressure on the USD.
Since most countries of the world are still in quarantine, long-term purchases of stock indices remain at risk.