After decent gains in Asia, European equities are trading higher on Tuesday amid signs of progress in the fight against the coronavirus outbreak in the United States and Europe. Also, investors are optimistic ahead of Eurozone finance ministers meeting later today. The authorities will likely agree a list of measures to mitigate the impact of the coronavirus on the economy.
Against this backdrop, UK’s FTSE 100 adds 3.01 percent to 5,750, Italy’s FTSE MIB gains 4.23 percent to 17,760. France’s CAC 40 rises by 3.15 percent to 4,483, while German DAX 30 rallies by 3.98 percent to 10,476. U.S. stock index futures point to a positive open, with futures for the Dow Jones Industrial Average jumped over 800 points ahead of the opening bell. President Donald Trump said Monday there’s tremendous light at the end of the tunnel with ten different therapeutic agents in active trials. However, the cases in the U.S. topped 347,000 with at least 10,000 deaths.
As for currencies, the greenback has switched into a corrective mode after the recent rally. The improvement in risk sentiment added to the selling pressure surrounding the dollar. As such, EURUSD jumped to the levels marginally below the 1.09 level that acted as resistance and capped the upside movement. A daily close above this handle is needed for a confirmation of a local reversal. Otherwise, the common currency may come under renewed pressure in the short term.
USDJPY has settled around 109.00 after a brief dip to the 108.60 region earlier in the day. The bearish bias is limited due to a weak safe-haven yen demand as traders continue to bet on further slowing in coronavirus cases across the globe. Also, market participants express optimism over the upcoming OPEC+ negotiations on possible supply cuts. On the upside, the immediate resistance comes around 109.40. Once above, the pair may retarget the 110.00 handle.
In commodities, Brent crude struggles to extend gains on Tuesday as there is too much uncertainty in the market ahead of the OPEC+ meeting. Oil prices remain below the $34 level that acts as the main resistance on the way to $36. If Saudi Arabia and Russia achieve consensus this week, Brent may jump above $40 and see a decent rebound from multi-year lows. Otherwise, a massive plunge should be expected. Gold prices registered nearly one-month highs around $1,671 earlier on the day but failed to preserve the upside impetus and turned lower in the daily timeframes. Still, the bullion remains elevated, staying above $1,650 area after a fairly aggressive rally witnessed yesterday. The key support for the precious metal arrives at $1,600.
Nathan Lambert, Head of Global FX Analytical Department