The weekly global death toll from the virus is rising again following six weeks of declines
Wall Street equities fell on Tuesday as risk aversion reemerged amid fresh Covid restrictions and Europe and globally. Adding to the negative tone in the markets, Treasury Secretary Janet Yellen that the U.S. economy remains in crisis while potential tax hikes to pay for Biden’s $1.9 trillion relief bill weighed on investor sentiment as well. As a result, the S&P 500 index fell 0.76%, the Dow Jones shed 0.94% while the Nasdaq sank 1.12%.
On Wednesday, Asian stocks finished broadly lower amid a deterioration in the outlook for economic recovery after the European governments extended anti-coronavirus lockdowns. Furthermore, the World Health Organization said the weekly global death toll from the virus is rising again following six weeks of declines. Against this backdrop, Japan’s Nikkei 225 fell 2.04%, Hong Kong’s Hang Seng index slid 2.03%, the Shanghai Composite declined 1.3% while Australia’s S&P/ASX 200 bucked the trend, to gain 0.50%.
In Europe, shares opened lower, hitting two-week lows amid renewed lockdowns across the Eurozone. The pan-regional STOXX 600 index fell 0.6% in early trading. On the positive side, manufacturing PMI in Germany came in at 66.6 in March versus 60.8 expected and 60.7 prior, while services PMI unexpectedly expanded to 50.8 in March versus the previous month’s reading of 45.7 and 46.2 anticipated.
Broad-based risk aversion sent the USD index to four-month highs on Wednesday. EURUSD sank below the crucial 100-DMA and was last seen nearing the 1.1800 figure for the first time since November. Of note, the common currency remains under heavy selling pressure despite upbeat economic data out of Germany, suggesting the pandemic-related developments are driving the markets for the time being.
Elsewhere, Brent crude bounced slightly from early-February lows seen in the $60.30 area earlier in the day. Oil prices are licking would following yesterday’s plunge by 6%. Despite the modest recovery, downside risks continue to persist ahead of the EIA weekly report due later today. Overnight, the API data pointed to a rise in US crude oil inventories by nearly 3 million barrels.