May 06 2020 0
Tensions around the globe are surely affecting the market right now. We should pay attention to the latest updates today and figure out what forex trading strategies we should choose next.
The origin debate
U.S. President Donald Trump and Secretary of State Michael Pompeo have confirmed very clear evidence that the new coronavirus strain has killed more than a quarter million people worldwide likely escaped from Wuhan Institute of Virology, A lab that studies some of the world's most dangerous pathogens. But the US intelligence community and others don't feel too convinced. A large part of the 17 agencies that provide and analyze intelligence to the US government believes that a pandemic began after a virus was leaked from Wuhan laboratory. However, there is a clear division between and within intelligence agencies: that although they often observe the same set of events, they come to different interpretations.
Speaking of the disease situation, the number of coronavirus deaths in the UK has skyrocketed more than in Italy, making the UK the most vulnerable country in Europe. Hong Kong began to relax restrictions and the state of Bavaria set out to reopen its economy - which could serve as a blueprint for the rest of Germany. Pfizer, meanwhile, has tested the vaccine for the first patients in the United States.
Asian stocks had a chaotic start on Wednesday, following an "unconscious" blow of US stocks late yesterday, as investors weighed optimism that many economies are coming. mitigation of blockade before cautious comments from Federal Reserve officials. Soaring oil. The Hong Kong futures market slightly increased, while the Australian market slipped. The S&P 500 index futures contract rose at the opening after the previous gain of the benchmark for the second day in a row, driven by the growth of health care, utility and information technology stocks.
However, the increase of nearly 2% was cut in half in the last trading hour after Fed Vice President Richard Clarida warned the economy would need additional support from the government. Chairman of Fed Louis James Bullard said the central bank's efforts were "very experimental". President Donald Trump continues to blame China for the global pandemic, raising concerns that a trade war will resume. Treasury bonds dropped.
Loan or not?
With China's economy in freefall and millions of small businesses lacking cash, the online lending platform backed by billionaire Jack Ma has entered into a crisis. It was in mid-February, near the peak of China's coronavirus outbreak, and MYbank had to decide whether to reduce credit risk or continue lending money. After a two-day marathon, the company's executives agreed with 25 partner banks on a risky strategy: cut interest rates and turn on credit taps like never before. Now, MYbank is on track to issue a record 2 trillion yuan (US $282 billion) loan to small and medium-sized companies this year, an increase of nearly 18% compared to 2019.
Bond dealers face difficulty
In the face of the biggest boom in U.S. bond sales since World War II, cracks are emerging in a Wall Street monopoly club responsible for ensuring a smooth market run. For decades, companies, called primary dealers, have been sitting in the Treasury Bond market, buying newly issued bonds to spread across the financial markets and dealing directly with the Treasury Department. Federal Reserve. This relationship has helped the Fed fulfill its policy goals, however, the effects of recent months indicate that the group is at stake.
Dominated by big banks like JPMorgan Chase & Co. and Goldman Sachs Group Inc., 24 primary dealers struggled to keep the cash flow moving in the global financial core amid the coronavirus panic in March. One proposed solution was: ending the situation near exclusive on Wall Street of club members. The giant bond investment management firm Pacific thinks asset managers should be included. That could benefit Newport Beach, a California-based company and will add trillions of dollars to the collective firepower of the primary dealers, adding to the influence of the giant investors.