CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

Europe Points Lower As Second Wave Fears Increase

Article By: ,  Senior Market Analyst
June 22, 2020 3:15 AM
European bourses are pointing to a weaker start as fears of rising coronavirus cases drag on sentiment. Although low volumes suggest weak conviction.

Germany has seen its R rate jump to 2.88 in just four days, up from, 1.79. A number over 1 indicates that the spread of the virus is increasing as lockdown measures are eased. Even though the number of cases in Germany is low, the rise is unnerving. The markets will be watching developments closely here. Germany has been relatively successfully in keeping deaths low and reducing the spread quickly in the first wave, investors will need to this second wave nipped in the bud to boost optimism that a second wave won’t be as devastating the first. 

Meanwhile, in the US states such as California and Florida are still seeing the number of cases rise. Apple announced that it will be shutting 11 stores owing to rising cases in some states adding to investor woes. On a positive, the recent outbreak in Beijing appears to be fading.

UK to reduce social distancing rules
What is becoming increasingly clear is that any covid-19 recovery will be far from a straight line. Hopes of a V-shaped recovery to be tested further this week as the UK is set to reduce its social distancing rules down to one meter in an attempt to boost the prospects of survival for shops, bars and restaurants as they reopen. Chancellor Rishi Sunak has also hinted towards a reduction in VAT to get the UK spending again.

Spain reopens for tourism
Spain has removed its state of emergency, reopening its borders to allow summer tourism to restart. The next few weeks will be crucial as investors keep a close eye on coronavirus cases to see whether this big step forward will also mean a big increase in cases. 
Whilst localised flare ups in coronavirus cases are likely to happen, the speed and effectiveness of dealing with them will be paramount.

Survey data in focus
Today, the UK economic calendar is fairly empty with CBI business trends in focus. European consumer confidence could also attract some attention. This data should provide a sense of how quickly sentiment is recovering as economies reopen. This is key for a recovery in domestic demand. Expectations are for a slow increase in confidence in June to -15, up from -18.8
Looking ahead a barrage of PMI data from UK, Eurozone and the US will provide further clues as to the health of the economic recovery. 

FTSE Chart


StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024