The worst case scenario of epidemiologists, which was already discussed in spring or summer, is being fulfilled - this autumn's epidemic is accelerating, which may have serious consequences not only for people with COVID-19, but also for other patients, not to mention further possible restrictions.
Investors seem to fear that the exponential growth of new coronavirus cases will lead to the emergence of new restrictions on business. And it seems that these fears are not unfounded. Without them, but also without a sufficient number of tests, many health care systems may soon become inefficient, and doctors will have to choose who to help first, who to admit to the hospital, who not, who to connect to the ventilator, and who not. This black vision of the autumn-winter second wave of the epidemic seems to be coming true right now before our eyes.
One of the more radical steps was taken by the French President, who in many cities, including Paris, introduced a curfew after 9:00 pm. Germans or Spaniards are also implementing further preventive measures, and in Italy, 7332 new cases were reported on Wednesday, which means more infections than the March record of 6557.
The Italian FTSE MIB index fell by more than 2 percent in early trading hours on Thursday. The Spanish IBEX 35 fell by more than 1 percent, reaching its lowest level in two weeks. The number of coronavirus infections continues to increase, even after the country has introduced new restrictions. Spain reported 11,970 new COVID-19 cases on Wednesday, compared to 7,118 registered on Tuesday. On Wednesday the Catalan government approved the closure of all bars and restaurants in the region from Friday for 15 days.
In Germany the DAX index seems to be losing 2.7 percent and in France CAC40 is falling by more than 2 percent. Thus, as in February or March, the time of the bear market may begin for those who will try to trade on falling stock indices.
Serious consequences of the possibility of introducing the red zone in Poland in the whole country are observed on the forex market. It is possible that today we will get new restrictions on business activity in Poland, which may translate into depreciation of the zloty and adjustment of the rate to the circumstances. Euro costs 4.54 PLN today, although only a few days ago it was 0,1 PLN cheaper. This morning, the dollar costs 3.87 PLN and the pound costs 5.03 PLN.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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