The summit of EU leaders in Brussels continues today for the fourth consecutive day. It was supposed to end on Saturday but the difficulty of the talks and their importance made the heads of the member states’ governments stay longer to try and reach a compromise. Talks are set to resume later today.
European stock indices are likely to be on the losing side today due to the indecision coming from the summit. The coronavirus was devastating for several economies within the European Union and stimulus is sorely needed. Conversely, stocks in Europe will react positively when a proposal is accepted by the EU, but for now they remain under pressure.
The euro, however, is strong today, just as it was last week. Investors seem confident that an agreement on the stimulus proposal will come soon, which is boosting the single currency. It is fast approaching the 1.15 level versus the US dollar, a high last seen in January 2019.
Speaking of the coronavirus, today the total number of cases worldwide is 14.6 million. The top five most affected regions are the United States (3.8 million), Brazil (2.1 million), India (1.1 million), Russia (770,000), and South Africa (364,000).
The ongoing coronavirus pandemic seems to no longer be a negative factor for the markets in general, with risk appetite rising and the demand for safety assets decreasing. This is largely due to progress in the preparation of vaccines and meds to treat the novel coronavirus - the results of several clinical trials are expected this week.
However, Covid-19 remains a concern for commodities, especially oil, because it could cause another drop in demand.
Thus, today we see oil prices are decreasing again. The Brent crude dropped to $42.84, while the WTI reached $40.49 today.
“Stimulus” is also the main keyword of today in the United States, where the government is trying to win Donald Trump’s approval of a new plan to support the economy, as the current amount of allotted funds will expire next week.
