Overnight, Wall Street stocks saw the steepest decline since March as investors expressed concerns over a second wave of coronavirus. In is no wonder that Asian equities followed suit while European equities opened lower as well. However, some signs of retracement in the US stock index futures helped to ease the downside pressure in stock markets some time later. Furthermore, Germany’s DAX 30 has already nearly regained lost ground, suggesting a mild correction could be expected after an aggressive sell-off.
Of note, not only risky assets suffered a decline. Gold prices retreated after three days of gains. However, the precious metal has already regained the bullish bias today, clinging to the $1,730 handle. Meanwhile, bitcoin plunged dramatically yesterday, after another failed attempt break above the $10,000 figure. As a result, BTCUSD found support around $,9000 and bounced to the $9,500 area.
Global investors proceeded to a massive sell-off amid resurgent fears about a second wave of coronavirus which in turn would cap the fragile economic recovery and cause an even deeper recession. Against this backdrop, oil prices plunged as well. Brent crude dipped under the 100-daily moving average and extended losses to the $37 level on Friday. As risk sentiment has been gradually improving, this figure could act as support and trigger a recovery in oil futures following a massive slump. However, as the coronavirus theme is back in market focus, it will be harder for bulls to find reasons to reenter the game.
As for the dollar, its safe-haven status helped the US currency to rise against the high-yielding counterparts. EURUSD retreated from the 1.14 barrier and is now trying to regain the 1.13 handle. GBPUSD is nearing the 1.26 level after a rejection from the levels above 1.28. Meanwhile, USDJPY turned green on Friday after four days of losses, suggesting risk aversion could ebb further in the short term. The pair managed to hold above 106.50 and has already regained the 107.00 figure.