After a three-day surge, US stock markets tumbled around 3% on Friday despite the House of Representatives approved a $2.2 trillion aid package amid the coronavirus outbreak. On Monday, equities tried to show a bullish bias initially but settled in the negative territory afterward, except for Australia’s S&P/ASX 200 that rallied 7,00% after Prime Minister Scott Morrison committed A$130 billion to help save job during the pandemic. Meanwhile, the Chinese authorities stepped up easing measures to relieve pressure on the economy, with the central bank cutting the interest rate on reverse repurchase agreements to 2.20% from 2.40%. However, China’s Shanghai Composite lost nearly 1% during the session.
In Europe, shares dipped early on Monday, with the pan-European STOXX 600 index being down 0.6% on the day after the decision of the European Central Bank to ask banks not to pay dividends on their stock or buy back shares until October. UniCredit, ING and ABN Amro were among the first lenders to comply with the central bank’s recommendations. Also, the German council of economic advisors said that a recession in 1H 2020 is unavoidable, and the German economy will shrink significantly this year. These comments added to the selling pressure at the start of the week.
In currency markets, the dollar switched into a recovery mode after a sell-off witnessed last week. EURUSD has retreated to local lows around 1.1060 from the highs around 1.1150 registered on Friday. Month-end flows coupled with a stronger dollar and the prevailing risk aversion add to the negative pressure surrounding the common currency. Besides, fresh data showed that the European Commission’s consumer sentiment deteriorated index to -11.6 for the current month.
In other markets, bitcoin has found local support around $5,800 and recovered above the $6,000 psychological handle after three consecutive days of losses witnessed last week. The key resistance still comes around $6,900 at this stage, and as long as the cryptocurrency remains below this level, downside risks will likely persist. On the downside, the BTCUSD pair needs to reclaim the $6,000 figure as a support zone. Otherwise, the token may resume the bearish bias and threaten the $5,800 area.