- The rate of increase globally in fatalities and new confirmed infections from the coronavirus pandemic continues to increase exponentially, with its epicenter now in New York. A world recession or possibly even depression appears to be inevitable, with Goldman Sachs forecasting a 34% drop in U.S. Q2 annualized GDP and other analysts seeing a 30% unemployment rate in the near future. If correct, these will be the worst such numbers seen since the 1930s.
- The rate of increase in new confirmed cases and deaths is levelling off in the hard-hit European nations of Italy and Spain, but both are still increasing in the U.K. where the Prime Minister, Boris Johnson, was admitted to hospital last night 10 days after he tested positive for the coronavirus. The strongest growth of the virus in the world now is happening in New York City and New York State, with the U.S.A. now leading the world in number of confirmed cases (about 25% of the global total), having had almost 10,000 deaths. Even in Germany, the death rate to confirmed infections has risen to about 1.5%.
- World stock markets, despite the bad news, having been rising since this week’s open, after falling last week. However, many analysts believe stocks remain vulnerable to further sharp falls as the economic damage of the pandemic mounts.
- WTI Crude Oil bounced back strongly from its 18-year low below $20 reached last week.
- Currency markets have been dominated by strength in the U.S. Dollar, while the British Pound is looking relatively weak over the short-term.
- Markets have been affected by high relative volatility, but this is decreasing, although stocks are still showing a lot of movement in both directions.
- The key factors in markets today will likely be how the U.S. stock market behaves when New York opens, plus the Reserve Bank of Australia’s monthly cash rate and rate statement due later in the Asian session.
Forex Today: World Recession Inevitable
Adam Lemon