France And Germany Are Set To Introduce New Anti-Virus Measures
S&P 500 futures are down by more than 1% in premarket trading as traders fear that the rising number of new coronavirus cases will force various countries to impose new lockdowns, putting huge pressure on the world economy.
Today, the President of France Emmanuel Macron is expected to announce additional curbs in order to deal with the second wave of the virus. In Germany, Chancellor Angela Merkel would discuss closure of restaurants, bars and gyms as the number of new cases continues to increase rapidly.
Meanwhile, the situation is also very challenging in the U.S. which has registered more than 75,000 new cases on Tuesday.
Oil Declines Below The $38 Level As Crude Inventories Increase
Yesterday, API Crude Oil Stock Change report indicated that crude inventories increased by 4.58 million barrels. The market interpreted this report as a sign that demand was slowing down.
In addition to rising inventories, oil traders have to evaluate the risks of new lockdowns in European countries which will certainly hurt the demand for oil.
As a result, a mix of increasing inventories and virus fears has put significant pressure on oil prices which are down by more than 4% in today’s trading session.
This price action does not bode well for oil-related equities which have already found themselves under material pressure in premarket trading.
Strong U.S. Dollar Puts Pressure On Gold And Silver
Virus fears have provided significant support to the American currency which looks ready to serve its traditional role of a safe haven asset of last resort.
The U.S. Dollar Index has managed to get above the 20 EMA at 93.25 and is currently testing the 50 EMA level at 93.55. Meanwhile, gold and silver have found themselves under significant pressure as strong U.S. dollar is a bearish catalyst for precious metals.
Interestingly, traders have not boosted their purchases of precious metals which often serve as safe haven assets which means that shares of gold and silver miners are set for a very challenging trading session.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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