While still ugly, the markets pulled back from the worst of the session’s losses, as investors struggled to swallow the latest round of covid-19 restrictions in Europe.
The game changer this Thursday was the announcement that London is moving from Tier 1 to Tier 2, meaning different households are no longer allowed to mix indoors. And while many areas of the country were placed under similar, or harsher, measures earlier in the week, the London-centric nature of the markets, and the prominence the capital has in the UK economy, meant the change hit harder.
Falling 2%, the FTSE continue to sit at a month and a half low of 5820. It was lifted from its session lows by the pound’s own painful performance, with the currency unravelling much of yesterday’s growth following Boris Johnson’s claim he is ‘disappointed’ in the progress of the Brexit deal negotiations. This sent cable 0.8% lower, while causing sterling to drop 0.4% against the euro.
Over in the Eurozone the DAX remained the worst major performer, shedding 360 points as it tumbled to a 16-day nadir of 12,670. And with curfews in various cities around France, including Paris, the CAC was down 2.4% to 4820.
Though it doesn’t necessarily have the same relationship to covid-19 restrictions as its European peers, namely due to the size of the country, the Dow Jones’s day was nevertheless soured by the recent announcements. That and the murky situation regarding a stimulus package, with Mnuchin and Pelosi continuing their talks despite the former believing a pre-election agreement is unlikely.
This left the Dow down 0.8%, or 230 points, erasing a week’s worth of gains as it slipped below 28,300.
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