Most of the world's major stock indices are declining today, and the infamous leader seems to be the German DAX, which has already lost more than 3 percent in the hustle and bustle. The scale of the falls has increased with the possibility of further economic restrictions.
The German DAX is at its lowest level since mid-June, Euro Stoxx 50 has fallen to its lowest level since the end of May, while the Spanish IBEX is approaching its last seen in March. The French government is considering a new national lockdown from midnight on Thursday, although the planned restrictions are expected to be more flexible than the two-monthly restrictions that started in mid-March, Reuters said. President Emmanuel Macron is due to deliver a speech late tonight.
Meanwhile, German Chancellor Angela Merkel wants to close all restaurants and bars as of November 4, according to Reuters. Chancellor Merkel will probably organize a meeting with regional leaders on this issue. In the UK, Prime Minister Boris Johnson is under pressure from the new lockdown, according to the Telegraph. The FTSE 100 index is already at its lowest level since April, and the French CAC40 has fallen to the levels last seen in late May.
Under the weight of the epidemic and the lack of agreement on the aid package for the American economy, futures contracts on American stock indices are also bending over. Futures on S&P500 seem to be losing almost 1.3 percent, on DJIA more than 1.5 percent, and the Nasdaq 100 futures contract is falling by 1 percent. US President Donald Trump said on Tuesday that the economic aid package is likely to be prepared after November 3 because the administration is unable to bridge the gap with the Republicans in the Senate as well as with the democrats in Congress.
On the currency market it is impossible not to pay attention to the sell-off of the Polish zloty. The zloty seems to be affected not only by the epidemic situation, but also by political events in the country. The combination of these two factors may be a very unfavorable mix for the zloty. Nevertheless, the recent statements of NBP representatives show that the weakening of the Polish zloty is a good thing for the MPC.
The EUR/PLN exchange rate has now exceeded 4.60, so the euro is the most expensive since March, when the peak was set at 4.63. If it is exceeded, we will be talking about the euro which is the most expensive since 2009. This scenario is not excluded.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
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