[런던 로이터=뉴스핌] Reporter Kim Seon-mi = On the 21st, the global financial market rapidly shifted to risk-off (dangerous asset avoidance) on the news that the coronavirus causing COVID-19 in the UK showed a new mutation, and risky assets such as stocks and crude oil plummeted. On the other hand, safe assets such as the US dollar and gold are on the rise.
At the beginning of the European stock market, the pan-European index, the Stokes 600 index, fell 2.1%, while the travel and leisure sector index fell 5%. While the UK stock market has plummeted more than 1%, banking stocks such as Lloyd and Barclays are falling 6-7%.
| British Prime Minister Boris Johnson [사진= 로이터 뉴스핌] |
The MSCI Japan Excluding Asia Pacific Index, which hit an all-time high last week, fell 0.2%, and Japan’s Nikkei Index also fell 0.4%, retreating from the highest since April 1991.
U.S. S&P500 stock index futures started rising on the same day as Senate Representative Mitch McConnell said that the U.S. Congressional leadership has reached an agreement on a $900 billion corona 19 stimulus plan, but fell 0.6% at the beginning of the European market.
The Chicago Options Exchange (CBOE) Volatility Index (VIX), known as the Wall Street Fear Index, surpassed 25% for the first time since the 11th.
With the rapid spread of the coronavirus, which has increased infectivity by 70% due to mutations in the UK, British Prime Minister Boris Johnson began quarantine steps in London, Kent, Buckinghamshire, Berkshire, Surrey, Portsmouth, and Essex from the 20th for two weeks. Upgraded to the stage. As a result, some 16 million Britons were again tied up in a reinforced blockade.
The World Health Organization (WHO) reports that new mutations have also appeared in Denmark, the Netherlands and Australia. France, Germany, Italy, Ireland, the Netherlands, Canada, and Israel have temporarily banned flights to and from the UK.
MUFG analysts predicted that “strengthened containment measures will continue for several months until vaccination is done to some extent,” and “thereby, the slowdown in economic growth will intensify and the recovery point will be delayed.” He added, “This poured cold water on the optimism that expected a strong economic recovery next year.”
Kazuhiko Saito, chief analyst at Fujitomi, said, “Investors’ rosy outlook for next year has disappeared in an instant with a new virus mutation.”
In the foreign exchange market, safe assets are gaining momentum, and the dollar index has risen nearly 0.5% to 90.68 compared to the six major currencies, and is rebounding from last week to 89.723, the lowest level since April 2018. Speculators’ betting on the dollar decline, which has increased to the highest level since September, is also shrinking.
Japanese Prime Minister Yoshihide Suga has issued an order to keep the 100 yen per dollar exchange rate, and reports in Japan’s Nihon Keizai newspaper are also putting upward pressure on the dollar.
Trade relations negotiations between the UK and the European Union (EU), which are in a stagnant state due to the emergence of the coronavirus mutation in the UK, are also expected to become more complicated, and the pound is plunging by nearly 2% against the US dollar. The pound’s daily implied volatility index is approaching its peak in nine months.
In the commodity market, prices of crude oil and copper, which had been driven by strong expectations for economic recovery next year, bowed their heads. North Sea Brent futures prices have fallen by more than 3%, and copper prices, considered a measure of global economic health, are retreating from the first breakthrough since 2013 at $8,000/ton.
On the other hand, the spot price of gold rose to the highest level in six weeks at $1896 per ounce.
The prices of US and German government bonds, which are representative safe assets, are rallying, and the rate of return moving opposite the price is falling 3-4bp (1bp = 0.01% point).
Another important indicator reflecting expectations for economic growth, the US 2-Year 10-Year Yield Curve has also flattened. The yield curve steepened to the highest level in nearly three years last week due to anticipation of further US economic stimulus.
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