Where to begin. Tuesday saw the largest one-day rally for the Dow Jones Industrial Average since 1933. Of course, everything is relative. Let’s not forget the carnage that got us low enough to induce such a bounce.
The promise of a sizeable US stimulus plan would be the catalyst. Meanwhile, President Trump wants the US economy open for business in three weeks, this while the state of NY becomes the new epicentre for the current crisis.
And as I have said before, this disease does not discriminate. Young and old, rich and poor are all at its mercy. Prince Charles, the heir to the British Throne, has become its latest recipient.
So what does all this mean for financial markets today?
The US session, other than a brief roller-coaster in equities after the open of Wall Street is strangely quiet. The market has digested to the US stimulus plan and seems to like it. EURUSD drifts either side of 1.0800 and USDJPY is happy at 111.50.
GBP had a sharp spike to 1.1970 on the back of some better than expected data from February. Yes, February. Not surprisingly that rally didn’t last long and by the time Europe closed for the day, we were back at 1.1700.
Gold, which has seen a sharp rally from recent lows is happy to trade between 1610 and 1620 albeit on wider than normal spreads. As the day progresses US equities begin to explode higher with the DJ reaching 22,000 at one point, a gain of 1,300 on the day.
FX reacts by selling USD. EURUSD rallies to 1.0890 and USDJPY
Cue a drop in the DJ of 800 points in the last 10 minutes of trading. Rather surprisingly FX barely reacts as exasperated traders throw in their towels for the day. The DJ closes +2.4% but the Nasdaq slips into the red closing down 0.45%.
I thought about showing you an equity market chart, but took one look and decided otherwise! So you get the currency of my home country. GBP. I’m showing you a daily chart today and you can see we have a line of support turned resistance just shy of 1.2000.
Wednesday’s bounce touched that line before reversing. Maybe not the right market to play levels off d
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