Today we are seeing a much needed improvement of market sentiment and a wave of cautious optimism on the financial markets. The reason for this lies in the readiness of European countries, as well as the United States, to completely reopen their economies and return back to normal. In Asia, Japan is also signalling the same, ending its state of national emergency. It appears that the countries affected by the coronavirus pandemic from February until April are now all done with the virus.
The United Kingdom is also rumored to be close to abandoning the lockdown measures. However, in the UK’s case, it is not so much due to a careful evaluation of the current epidemiological situation, as much as a result of a government scandal. A few days ago it became known that one of Prime Minister Boris Johnson’s chief aides, Dominic Cummings, did not follow the guidelines for social distancing and violated his self-quarantine, despite being sick, for personal reasons. With the PM defending him, the UK public now sees no point in following the rules that government members themselves disregard.
This more optimistic stance expresses itself in a higher risk appetite and a lower demand for safety assets today. We are observing a slight weakening in the US dollar, gold, and other safe havens.
Still, other parts of the world continue to wrestle with Covid-19. Russia is still reporting over 8,000 new cases of the coronavirus per day. The disease is also spreading fast through Mexico, India, Iran, and Pakistan, among others.
Other countries continue to find new Covid-19 cases each day, though not at such an alarming rate as the ones previously mentioned. The World Health Organization remains on alert and is still warning that a second wave of the pandemic is a very real possibility.
In other news, oil prices have stabilized in the mid-30s for now. The WTI today reached $34.08, while the Brent crude is trading near $36.04. Oil could increase in price if Russia officially confirms that it plans to extend its production cuts in the future.
