EUR/USD

Markets are in a state of panic and confusion. Until recently, well-functioning models and interpretations have stopped moving traders. Bidders make decisions emotionally, without paying any attention to the statistics that come out. The market is now at the mercy of fears about the coronavirus. On Friday, prices were hovering in one place, until it became known that Spain and Italy, a couple, surpassed America in the number of infected. And the Germans have overtaken the middle Kingdom in this respect. As a result, the EURUSD pair went down. Especially striking was the single decline of the Euro against the dollar. The British Pound, for example, steadfastly held positions.

The markets are a mess
The markets are a mess
At the same time, in the United States itself, a new record was set for the spread of the epidemic, and the number of confirmed cases of coronavirus infection increased by 30.1 thousand. The European market and the US market are the largest on our planet. And it is also very obvious that Europe and the United States are two of the world's largest financial centers. Only Europe and North America have enormous liquidity. This means that the main global investments are controlled by American and European investors. Therefore, as soon as a crisis occurs and anti-risk sentiment dominates the markets, these huge masses of money move to conditions where they can be placed and wait out the best of times. In cases where the shocks do not cease, European investors and owners of capital moved money overseas. Then back again. And so on.

Today, coronavirus is the main trigger. Market participants do not pay any attention to the emerging macrostatistics. And data from the UK on prices came out a week late, so traders did not pay any attention to them. In addition, statistics from Britain were distorted, due to the lack of demand for housing. At the same time, it showed a March acceleration in price growth. Citizens in quarantine remain in self-isolation and try not to leave the shelter. And suddenly, for no reason at all, the price of housing began to rise. Why is this happening? This can only happen at times of demand. But what exactly can serve as a catalyst for demand, especially for expensive purchases? In General, the British statistics were not accurate and doubtful. A week's delay doubles the distrust of it. This could have caused markets to ignore it.

Macroeconomic data from Europe came out in a perceived negative light. Again, the Market did not react in any way. The Euro quickly became cheaper after the publication of economic indicators from overseas. However, the rate of decline in producer prices increased from minus 0.7 percent to minus 1.3 percent. This has been happening for 7 months. This means that the potential for an increase in inflationary pressure does not yet exist. It is most likely that inflation will continue to show a tendency to weaken. In such conditions, the Central Bank of Europe is quite capable of lowering the rate to minus levels. The decline of the labor market in the United States may be a similar scenario for the European region. Already in Spain, the number of citizens who lost their jobs has approached three hundred thousand. At the same time, the indicator was expected to grow to forty-five thousand. This compares with the three million who lost their jobs in the States, if you take into account the different number of citizens living in Spain, with citizens living overseas. In General, these are huge values. Unemployment figures during the dot-com crisis of the noughties are not yet ahead, but this is little reassuring. And in Spain, unemployment was already high. In this crisis, which is the largest in history, the unemployment situation threatens to last for a more indefinite period. And the number of citizens who lost their jobs will grow steadily.

But this is not as bad as in the case of the United States, which the markets also did not pay attention to. It is difficult to imagine shock and concern when the unemployment data contains figures such as over 3,000,000 unemployed people. This has never happened before. In the entire history of statistics, such high rates and values have not been observed. It is difficult to realize that these unemployment figures are real. It is not clear what to do in such a situation, in which safe havens to hide. The idea of going back to the great depression comes to mind. In General, an agitated state that does not allow you to objectively look at the situation. And so a week passed, and the figure rose to 6,648,000 people who applied for unemployment benefits. This is already quite an exorbitant state, which is difficult to describe in words. It was expected that the figure will be around 3 680 000. This is a record figure, exceeding the data for the previous week. The situation itself in the current crisis has created such an amazing scale that it is really difficult to figure out what to do in such circumstances. But what really became a terrible fact is that for half a month, about ten million US citizens lost their jobs.