EUROPEAN STOCK EXCHANGES REDUCE THEIR CLOSING LOSSES

Most of the major European stock indices fell on Monday, as the latest assessments of the coronavirus epidemic in China and the United States have revived risk aversion among investors, but the latter are far from having given in to the panic and the day ended better than it started.

The latter lost more than 2.5% at the start of the session after the announcement in China of new travel restriction measures in part of Beijing due to the discovery of 36 new cases of coronavirus infection in the past 24 hours. , the highest daily figure since the end of March.

At the same time, in the United States, several states, from Florida to California, have recorded a record number of new cases in the past three days.

Another factor that contributed to the decline: Chinese industrial production figures in May, up 4.4% year on year after +3.9% in April when the market was hoping for better.

Thus, the CAC 40 index lost 0.49% to 4,815.72 points. The Footsie lost 0.66% and the DAX 30 dropped 0.32%.

WALL STREET SAVED BY THE FED

Wall Street ended higher on Monday, buoyed by announcements by the Federal Reserve on its corporate bond buying program that overshadowed fears of a resumption of the epidemic linked to the new coronavirus with the rise in cases. contamination observed in the United States and China.

After opening sharply in the red due to the increase in cases of contamination with the new coronavirus in many American states and the discovery of a new epidemic focus in Beijing, Wall Street pulled itself together following the clarifications provided by the Fed on the terms of its interventions on the secondary corporate debt market.

Thanks to this new measure, it will be able to buy back corporate bonds on the secondary market, which aims to help groups in need of liquidity due to the economic impact of the coronavirus.

The Fed said it would adopt an indexing approach to build a more diversified portfolio, which appealed to investors. The Federal Reserve also on Monday opened the registration process for banks wishing to participate in its $ 600 billion loan program for midsize companies, too large to qualify for another aid package for companies. less than 500 employees.

Consequently, the Dow Jones gained 0.62% to 25,763.16 points. The Nasdaq advanced 1.43% and the S&P-500 gained 0.83%.

Other points on the news of the financial markets

FOREX:

A sign that the renewed risk aversion remains moderate, the yen and the Swiss franc, which were clearly on the rise at the start of the session, lost ground over the hours.

The dollar index, which measures fluctuations in the US currency against a benchmark basket, dropped 0.28%. The euro took the opportunity to rise above 1.1265 dollars after returning to 1.1225.

Oil :

Despite doubts about the news from China and the United States raising fears of a slower than expected recovery in demand, oil erased its losses during the session.

Brent crude rose 2.56% to $39.72 a barrel after falling to 37.24 and US light crude WTI fell 2.37% to $37.12 after returning to 34.36.

Today's economic calendar:

CHART OF THE DAY – AUD/USD: AN RISING WEDGE

AUD/USD continues to run inside a rising wedge from the March low. However, the pair is facing resistance near 0.7020. This zone of polarity has been tested many times in the past, so breaking this level would open the way for an acceleration towards 0.7200.

On the other hand, in the event of a new failure, the bullish flow is likely to run out of steam and the Australian dollar could give ground. Therefore, a break of the lower band of the bevel would lead to a return towards the support zone at 0.6670-0.6710.