Global financial markets traded sharply lower on Monday morning’s trading session, on investor concerns for a second pandemic wave, after new outbreaks in Beijing’s wholesale food market over the weekend.
The fresh spike in infection cases in China followed the surging cases in US, India and Japan from last week, prompting fears of a second wave of infections and the potential economic damage it may cause.
Beijing reported its second consecutive day of record new numbers of COVID-19 cases on Monday, with 36 new cases for June 14, and the city’s highest daily infection count since late March. The recent outbreak has been traced to a major wholesale food market, Xinfadi, which accounts for 80% of Beijing’s farm produce supply sourced both domestically and from overseas.
India’s coronavirus cases have spiked over 320.000 in recent days, behind only the US, Brazil and Russia, according to Johns Hopkins University data. The daily reported cases in the country were about 10.000 per day over the last week, fuelling concerns the situation could spiral out of control even as the country starts to reopen after weeks of stringent lockdown.
Global cases: More than 7.9 million
Global deaths: At least 433,066
Worst-hit countries: United States (more than 2.09 million); Brazil (867,624); Russia (528,267); India (320,922) and the United Kingdom (297,342).
US futures dropped 3% on Monday morning, in response to the negative news for the virus outbreak in China over weekend.
Futures on the Dow Jones index dropped as much as 900 points, implying an opening near 24.700 points or -3.5% at the Monday open.
Asian markets opened the week with losses, following the overnight losses from the US markets. Kospi and Nikkei indices settled 4% lower, after China has shut down 6 wholesale food markets in the capital of Beijing to control a fresh spread of the Covid-19 virus during the weekend.
Crude oil prices fell more than 4% this morning as the resurgence of the pandemic in the US and China could weigh on the recovery of fuel demand after the first pandemic wave in April.
WTI crude oil price dropped 4.7% to $34.80 per barrel, while Brent crude traded 3.5% lower at $37.
80 per barrel. Both oil contracts lost about 8% last week, posting their first weekly declines since April.
China-linked Australian and New Zealand dollars fell across the board on Monday on the backdrop of fresh lockdowns in China, while investors fled to the safety of the US dollar and Japanese Yen.
Both AUD/USD and NZD/USD have lost nearly 3% from their multi-month highs, as investors booked some profits after the massive rally, on the risk aversion sentiment.
The DXY-US dollar’s index continued its rise from last week’s lows, gaining support from the sell-off in the risky assets such as stock market and risk-sensitive currencies. The index broke above 97.10 this morning, while the EUR/USD pair dropped near 1.125, well below its recent peak of 1.145.
Economic Calendar for June 15, 2020 (GMT+ 3:00):
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