There was no shaking the atmosphere of anxiety that has come to grip the markets this week, with Europe’s losses remaining at the nasty end of the spectrum.
With dire forecasts from both the OECD and the Federal Reserve, and fears that a second wave of coronavirus cases is emerging in the USA, the markets have spent the week being dealt one reality check after another.
Facing a third consecutive vertiginous decline, the FTSE shed 2.5%, sinking under 6200 for the first time since the start of the month. What makes the index’s fall all the more remarkable is that the pound was right there with it, sterling hitting the breaks on its recent winning streak to drop 0.8% against the dollar and 0.6% against the euro.
Investors may be fretting about the state of Brexit trade negotiations. Every headline highlights how little progress is being made – terrifying given that the UK is already set to be the hardest hit ‘developed’ nation in regards to a covid-19 recession, before the impact of a no deal exit is even factored in.
Over in the Eurozone the situation was just as alarming. The DAX sank 350 points to 12200, with the CAC clinging on the right side of 4900 as it fell 2.9%.
The Dow Jones could well spark even greater losses once the bell rings on Wall Street – the futures are suggesting a 650 point plunge for the index, dragging the Dow further and further away from Monday’s 15-week peak.
Before the US open comes the usual Thursday jobless claims reading. Analysts are expecting another 1.55 million Americans to have filed for unemployment in the week to June 6th. And though investors have tended to ignore this number for the last month and a half, the current mood may make the markets extra-susceptible to bad news.
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