Wall Street indices resumed the ascent and continued to regain ground overnight as investors were digesting the latest Democratic primary results. JosephBiden, the former US vice president, had notched an unexpectedly strong showing in the Super Tuesday primaries. Also, the House voted to approve an $8 billion emergency funding deal to address the coronavirus, which added to the upbeat sentiment in the markets.
On Thursday, Asian stock markets followed suit and saw decent gains during the session amid further signs that global policymakers are actively fighting the negative impact of the coronavirus outbreak. Of note, the International Monetary Fund made available about 50 billion dollars through its emergency financing facilities for low-income countries, vulnerable to the spread of coronavirus. Against this backdrop, Japan’s Nikkei 225 finished 1.09% higher despite the reports that the bank of Japan may downgrade its economic assessment during the upcoming meeting due in two weeks.
In Europe, equities opened the day with modest gains but turned negative quickly, as investor worries about the spread of coronavirus resurfaced after Switzerland reported the first death from the virus and Germany said that the total number of cases has increased to nearly 350 from 262 yesterday. In Italy, the government is discussing a stimulus package amid the outbreak. The package that could come as soon as next week will probably amount to 5 billion euros. The negative headlines made the pan-European Stoxx 600 reverse early gains and fall nearly 3% on the daily timeframes. US stock index futures point to a bearish open as well.
As for the economic data, German February construction PMI arrived at 55,8 versus 54.9 previously. The continuing rise in construction activity is a welcome sign for Europe’s largest economy but the growth rate could slow in the month to come as it was in 2019. Anyway, EURUSD resumed the rise and has already reversed yesterday’s losses, hovering above 1.1150. At the same time, the euro still lacks the bullish impetus to challenge the 1.12 barrier once again. As long as the pair remains below this level, downside risks are still there despite the recent bounce.
