Massive risk aversion continues on Wednesday, with global stocks keep bleeding amid fresh warnings about a possible crisis as a result of the spreading coronavirus outside of China. Asian stocks traded deeply in red, followed by European markets. However, Italy’s FTSE MIB, which sank by nearly 5.5% at the start of the week, managed to recover by 0.5% after a decline by 0.9% earlier in the session. Coronavirus death toll in the country reached 11 while the number of cases exceeded 370 on Wednesday.
France’s finance minister Le Maire reaffirmed that coronavirus impact to only shave off 0.1% from the country’s economy. Meanwhile, US futures pared earlier losses, sending mixed signals in the market. As such, it is possible that the sellers will take a pause after an aggressive plunge in stocks this week.
Elsewhere, the ECB governing council member Makhlouf said that the central bank will consider various options for its inflation target. He also added that monetary authorities have to consider whether current CPI data is helping to communicate the ECB’s objectives in the most effective way.
As for currencies, EURUSD has been gradually climbing for a fourth day in a row but still struggles to regain the 1.09 handle despite the dollar eased amid rising odds of a rate cut by the Federal Reserve. Should the sentiment surrounding the greenback continue to deteriorate, the euro may regain the key mark and extend the recovery with the initial target around 1.0950.
Meanwhile, the pound has already retraced yesterday’s gains and is now back below the 100-DMA, treading water around 1.2930. Against backdrop of the renewed weakness in the pound, EURGBP managed to climb to two-week highs around 0.8425, forming the second decent bullish candle in the weekly charts following a plunge during the previous week.
In cryptocurrency markets, bitcoin failed to hold above the $9,600 key support and briefly dipped below the $9,000 handle for the first time since late January. Now, as the BTCUSD pair has eroded the important psychological level, the next bearish target of $8,000 comes into focus. A daily close above $9,000 will somehow ease the selling pressure surrounding the largest cryptocurrency.
