Heading into the close, the FTSE 100 is down 40 points, while Wall Street is struggling to hold its ground after a weak open.
So far, Fridays in 2020 have not been great for equities, and today has not been much different thus far. US markets have opened on the back foot, although they are showing signs of life, while the FTSE 100 continues its disappointing run of form. Given the semiconductor index is up 10% from its lows, it looks like the market has come to terms with the coronavirus outbreak, particularly since yesterday’s headlines about a spike in cases have not seen much follow-through. But the weekend provides plenty of scope for unpleasant surprises, hence the cautious attitude displayed by risk assets on most Fridays in the year so far. But it has been yet another week where downside has failed to materialise in any real fashion, leaving investors with nothing to do but keep buying into the rally.
Looking into next week, it seems like attention will focus on the euro once again. Having fallen to a new three-year low against the dollar, the single currency will be hoping for some salvation in the form of ZEW data and flash PMIs. But today’s GDP reading sends a worrying signal, and even if a brief bounce is on the cards the longer-term problems require a massive response from governments and the ECB, something that will take time to materialise. In the meantime, more losses for EURUSD seem likely.
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