Weekly Digest - INVESTEC
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Yesterday saw a small risk-on tone to markets. US equities closed up 3.3%, with European equities up 2%. Currency markets saw a slightly firmer dollar, with $/£ closing at $1.24. This morning sterling remains trading at $1.24, but moves in the $/£ have been highly volatile as the UK has moved into the spotlight in the fight against COVID-19. Commodity markets saw gold flat at $1615 but continued volatility in oil markets. The WTI price of oil traded down by 6% at one stage, but ended the day only 1% down at $20.50. It is firmer this morning, possibly on the back of the better-than-expected Chinese manufacturing data.
The World Health Organisation has suggested that there are signs of stabilisation in Europe, with Italy and Spain both seeing slower new case growth. There has also been some good news on the progress towards a vaccine, with Johnson & Johnson and Abbot Labs both announcing lead vaccine candidates and an accelerated programme for development and testing.
In corporate news, it is expected that the majority of banks will be asked by their regulator not to pay their dividends whilst the crisis is with us. Today’s edition of the FT has a leader encouraging the Prudential Regulation Authority to mandate this.
In the US, the Trump administration is apparently preparing an additional $600 billion stimulus bill, on top of the $2.1 trillion already passed by Congress over the weekend.