Special Reports

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Is this a light at the end of the stock tunnel or just a flashlight? – Special Report

Posted on April 3, 2020 at 1:36 pm GMT

Stock prices are making a V turn after experiencing the sharpest downfall since financial crisis and bargain hunters are looking for the right time to buy. Hopefully, there are reasons to believe that the positive trend could continue, though on the other hand it is too early to rule out a dead cat bounce, and it is even challenging to predict a full recovery after the virus drama ends. Hence, while it looks like a good opportunity to get exposure to the market, a portfolio overloaded [..]

Virus-struck euro avoids collapse for now but divided EU casts shadow – Special Report

Posted on April 1, 2020 at 2:58 pm GMT

The outbreak of COVID-19 is the biggest crisis Europe has had to face since the second world war as the human and economic tolls reach levels that were inconceivable just a few weeks ago. Yet, while the euro hasn’t done particularly well during these dark times, it is far from being at the bottom of the performers league. But does the current exchange rate reflect investor confidence in the European Union’s handling of the outbreak or that it was undervalued [..]

Will endless QE push gold to new records? – Special Report

Posted on March 26, 2020 at 3:41 pm GMT

Gold’s reputation as the ultimate safe haven asset took a real beating lately, as the collapse in stock markets forced investors to ‘sell everything’ in order to meet margin calls. Yet, that might be about to change. With central banks unleashing a tsunami of quantitative easing (QE) at a time when fear is running rampant in the markets and government debts are about to explode, this seems like the perfect cocktail that could push gold back to record highs. That [..]

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Pound at 35-year low as Brexit leaves UK more exposed to global risks – Special Report

Posted on March 26, 2020 at 12:26 pm GMT

The pound is not usually synonymous with risk-sensitive currencies. That label is commonly used to describe commodity-driven currencies such as the Australian and Canadian dollars that move in tandem with global risk sentiment. But with the United Kingdom now formally having left the European Union, Brits could not have picked a worse time to ‘go it alone’. It’s no wonder therefore that at a time of heightened risk aversion, traders have been dumping the pound for safer investments, pushing it [..]

Why the Fed’s currency swaps may not calm the dollar funding stress – Special Report

Posted on March 24, 2020 at 3:32 pm GMT

The coronavirus crisis prompted investors to rush for US dollars, with the greenback skyrocketing against a basket of major currencies by nearly 9% over the past ten days in the aftermath. To ease the panic and avoid currency shortages in the banking sector, the Federal Reserve decided to enhance its latest stimulus package by increasing dollar supply in overseas markets through its swap line operations.  Yet, whether such an action will bring calm to nervous investors remains a question. How do FX swap lines function? FX swap [..]

Virus update: In the eye of the storm – Special Report

Posted on March 17, 2020 at 3:48 pm GMT

With world stocks collapsing and entire economies going into lockdown, everyone is wondering how much worse this crisis can get and how long it will last. In a nutshell, the situation will probably get worse before it gets better, both in financial markets and the real economy, as most of Europe and America are still far from ‘peak virus’. Ultimately, this shock will subside and given the overwhelming stimulus measures lately, the market rebound could be meteoric. However, we might [..]

Oil wars during a pandemic: It could get messy – Special Report

Posted on March 13, 2020 at 1:22 pm GMT

After the production alliance between Saudi Arabia and Russia fell apart, pushing oil prices dramatically lower on concerns of a supply war at a time when the virus outbreak depresses demand, everyone is wondering what’s the floor for crude. We seem to be headed for a period where markets are flooded with supply as the major players compete for market share, which could keep prices at very low levels. Ultimately, the dust will settle and prices could recover, but that [..]

Dollar crushed from market meltdown over COVID-19; can fiscal policy come to the rescue? – Special Report

Posted on March 11, 2020 at 3:24 pm GMT

As stock markets reel from the coronavirus, and investors flee to safe havens such as the yen and gold, the US dollar has turned out to be an unexpected casualty of the market turmoil. But after emergency rate cuts failed to lift sentiment, some movement on the fiscal policy front has managed to soothe investor nerves, at least temporarily, giving a small reprieve to tumbling bond yields, and in turn the greenback. Stocks suffer steepest losses since financial crisis Fears [..]

Could OPEC’s output cut shore up oil prices? – Special report

Posted on March 5, 2020 at 4:21 pm GMT

OPEC members tentatively agreed on Thursday to deliver a larger output cut than they initially proposed last month in the face of the coronavirus outbreak. But it is now up to Russia to approve it when it joins the meeting on Friday. While it is almost certain that Moscow will cave in, there is little optimism that the announcement will trigger the much-needed sustainable rally in oil markets even though a short-lived upside correction cannot be ruled out in the near-term.   Russial may not be happy, but [..]

Yen: Is the euro stealing its safe-haven status? – Special Report

Posted on February 26, 2020 at 4:35 pm GMT

The yen’s status as a safe-haven has come into question lately, amid concerns that the virus could hammer Japan’s exporters and tilt the already fragile economy into recession. The yen has also lost some of its defensive appeal because the euro is emerging as a funding currency, giving it haven-like characteristics as well. This is likely to suppress volatility in euro/yen, and going forward, any yen gains arising from virus concerns may be more visible against commodity currencies. Is the [..]

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