The market has shown increased volatility in relation to stimulus-related announcements.
Concerns that the anticipated coronavirus stimulus will not be quickly forthcoming sends global markets lower. Wall Street exchanges have been sliding for the past two sessions, and Asian markets followed suit on Thursday, heading sharply lower. As of 8:57 a.m. HK/SIN, Hong Kong's Hang Seng Index was down 2.21 percent. Both of China's benchmark indexes, the Shanghai Composite and the Shenzhen Composite, were both down on Thursday afternoon in Asia, 0.26, and 0.7 percent respectively.
European markets also took a nosedive, with the STOXX 600 down 19 percent on fears that the stimulus won't pass and news that the number of new COVID-19 cases surged across the globe, indicating that a return to normal economic activity won't be in the near future. Adding to concerns was a note from the World Health Organization saying that healthy people may not have access to a coronavirus vaccine until some time in 2022. The announcement came after two different trials were halted due to troubling outcomes. France announced a public health emergency on Thursday after cases in the country rose to dramatically, and the CAC responded by falling 1.89 percent. The FTSE was down 1.96 percent, while the DAX slumped 2.52 percent in early trade.
On Wednesday, US Treasury Secretary Steven Mnuchin said that the coronavirus stimulus would be difficult to reach before the US election on November 3. President Donald Trump had previously crushed the stimulus efforts in an effort to garner support for a stimulus that would come, he vowed, if he was re-elected. However, Trump quickly reversed his stance and reopened the conversation. Though the efforts have thus far proven fruitless, the market has shown increased volatility in relation to stimulus-related announcements; the markets fell following Trump's original announcement and rose when he reopened the discussion.
On the currency markets, traders favored the US dollar, sending the dollar index up 0.21 percent to 93.57. The pound fell against the greenback, easing 0.146 percent to $1.299, while the euro eased 0.179 percent to $1.173.