Wall Street indexed dipped on Wednesday along with global stocks, as the number of coronavirus cases around the world continued to surge, adding to concerns over a second wave of the virus and new lockdown restrictions. Around 37,000 new cases were reported in the US on Wednesday, the highest daily total since April.
The reports that the US plans to impose new tariffs on $3.1 billion of imports from major European economies such as France, Germany, Spain, and the UK, added to the downbeat investor sentiment. The S&P 500 Index declined 2.6% on the largest drop in almost two weeks. The Dow Jones Industrial Average declined 2.7%, and the Nasdaq Composite Index declined 2.2%.
Today in Asia, equities remained on the defensive amid the continued risk aversion across the globe after the International Monetary Fund slashed its economic forecasts again on Wednesday. Now, the IMF expects the global gross domestic product to contract 4.9% in 2020, lower than the 3% fall it predicted in April. South Korea’s Kospi dropped 2.27%, Australia’s S&P/ASX 200 fell 2.48% while Japan’s Nikkei 225 slipped 1.22%. Overall, the MSCI Asia ex-Japan index dipped 0.9%.
European stock markets edged lower at the open on Thursday amid the coronavirus spread as well as tariff concerns. The Trump administration is weighing tariffs on around $3.1 billion of imports from the UK, Spain, Germany, and France, which has been weighing regional equities since yesterday amid rising fears that its trade deal with China is in trouble.
Meanwhile, risk aversion continues to fuel the safe-haven dollar demand. EURUSD has settled above 1.12 ahead of the ECB meeting minutes and fresh economic data out of the United States including weekly jobless claims. If risk sentiment improves any time soon, the pair will be able to hold above the mentioned support and could even trim the latest losses. Otherwise, the 1.12 handle will turn into resistance.