Corona Virus
Stay Safe, FollowGuidance
Fetching Location Data…
James Hyerczyk
S&P 500

European shares turned higher on Friday after the U.S. Dow Jones Industrial Average futures contract erased earlier losses, and turn higher for the session. Traders are now anticipating an opening gain of more than 700 points in the U.S. blue chip average.

Gains in most sectors were responsible for the turnaround, led by a surge in basic resource stocks. Travel and leisure stocks remained under pressure.

At 10:53 GMT, the UK’s FTSE 100 is trading 5473.28, up 235.80 or +4.50. Germany’s DAX is at 9465.69, up 304.56 or 3.32% and France’s CAC 40 Index is trading 4206.53, up 162.27 or +4.01%.

Thursday’s Recap

On Thursday, the benchmark pan-European Stoxx 600 Index plunged 11% to record its biggest one-day loss ever. Traders said the catalysts behind the sell-offs were U.S. President Donald Trump’s announcement of travel restrictions from the European Schengen area and the European Central Bank’s (ECB) decision not to cut interest rates. The losses were also driven in part by a new declaration by the World Health Organization that coronavirus had reached pandemic levels.


Coronavirus Developments

U.K. Prime Minister Boris Johnson said on Thursday that up to 10,000 people in the U.K. many be infected with the virus, while BT confirmed that its CEO Philip Jansen had tested positive for COVID-19.

Additionally, EU banking regulators have delayed this year’s banking stress test and eased capital rules to encourage lenders not to switch off the faucets to a Euro Zone economy ailing from the pandemic fallout.

ECB Disappoints Investors

The European Central Bank decided Thursday not to cut interest rates, despite market expectations for a reduction amid the ongoing coronavirus outbreak. However, the central bank did announce measures to support bank lending and expanded its asset purchase program by 120 billion Euros ($135.28 billion).

Traders were expecting a rate cut of 10 basis points as a way to stimulate the Euro economy amid fears that a recession is about to hit the region. The ECB’s main rate stands at -0.5%. The negative rate is meant to spur banks to loan money rather than park it at the central bank.

Experts have argued that in comparison with other central banks, the ECB’s toolkit is more constrained given that its rates are in negative territory. Both the Federal Reserve and the Bank of England cut rates over the last week as ways to support their respective economies.

ECB President Lagarde Speaks

Speaking at a press conference, Lagarde said Thursday that the “spread of the coronavirus COVID-19 has been a major shock to the growth prospects of the global economy and the Euro areas economy and it has heightened volatility.”

Earlier in the month, Lagarde said that the bank was “ready to take appropriate and targeted measures” to deal with the economic fallout from the virus.

Lagarde further added, “Governments and all other policy institutions are called to take timely and targeted actions to address the public health challenge of containing the spread of the coronavirus and mitigate the economic impact.”

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker

  • Your capital is at risk
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.