Global stocks slumped on Thursday, July 31, 2020, when a promise from the Federal Reserve to support the US economy failed to please investors about the support impasse. financial, besides COVID-19 cases continue to increase.
In just one day, Europe’s STOXX 600 (STOXX) decreased to 0.7%. Accompanying that was the previous increase in Asian stocks was canceled, with the widest index of Asia Pacific shares outside Japan (MIAPJ0000PUS) falling 0.1%.
The MSCI equity index (MIWD00000PUS) in 49 countries has dropped by 0.3%, ending the three-day series of growth.
Investors are concerned about an outbreak of corona virus infections in the US and in parts of Europe and Asia. Countries like Australia, India, Vietnam and North Korea are always on high alert.
As expected, on Wednesday members of the Fed voted to eliminate short-term lending at rates ranging from 0% to 0.25%, starting March 15 when new virus strains attack the land. country. The policies that are constant but applied together, accompanied by the Fed’s promise to use the “whole set of tools” if needed, have increased the risk of risk overnight. All three indicators on Wall Street are also starting to be more careful.
President Donald Trump said on Wednesday that his administration and the Democratic Party in Congress remained “alienated” in a new bill on the COVID-19 bailout. Failure to agree would cost the $ 600-a-week unemployment package, causing it to expire this week.
“If that program expires completely, it is a significant push for the economy, so there is a potential risk,” said James Athey, chief investment officer of Aberdeen Standard Investments .
In monetary terms, the dollar index rebounded after falling to 93.17, the weakest level since June 2018.
ILS / UHA has been reduced due to expectations that the Fed will maintain an extremely loose monetary policy for many years to come and it is predicted that it will cause inflation to rise higher than before raising interest rates.
The weakness of the dollar has supported EUR / USD, which is aiming for the largest monthly increase in 10 years, having increased by about 5% so far this month. It was once down 0.3% at $ 1,1754.
Germany’s 10-year yield (DE10YT = RR) fell 2 basis points to -0.52% in early trading yesterday, near the lowest level in two months of Wednesday.
In commodity markets, falling oil prices amid fears that rising COVID-19 infections worldwide will jeopardize fuel demand recovery.