Early Signs of Recovery

The UK is set to ease the restrictions of the countrywide lockdown after the coming weekend, similar stories are also starting to emerge across Europe as Germany, Italy, and Spain are also beginning to ease the movement restrictions – similar stories are coming from within the US too as although they’re still very much going through what appears to be the peak of the virus spread – but as an increasing focus is placed on the global economy and the strain it is under due to the lockdown, there is now increasing pressure in governments to reassure the public what is being done to ensure a long recession won’t be met following a return to normalcy.

But movements in the markets have suggested an early positive sign across different markets – if you’re looking to find your start in trading whether that be looking at forex investment opportunities or commodities, now may be the time as markets begin to stabilize a little and prices seem as if they’re less at risk of large volatile changes.

 Stabilization in oil

One of the biggest markets hit during the spread of the coronavirus can be seen within oil – with a huge slowdown in traffic as road use slowed and air traffic also fell due to borders being closed, oil pricing really took a plummet with one of the US crude benchmarks falling to -$40 per barrel for a night.

There are now tentative signs of recovery, however, as some benchmarks are seeing rises as much as 10% – although this rise may be attributed to some states within the US reporting low numbers and with the countries across Europe easing restrictions, the news suggests that so long as there is no second wave or sudden change an upward trend is likely to continue.

FOREX recovery

We’ve also seen a shift in the forex markets, as some of the world’s top Forex brokers are reporting volatile markets, especially on the GBP: EU and GBP: USD front. This could be down to newer investors looking to capitalise on uncertainty, shifting the market disproportionately, or there could be a larger underlying picture.

The news that many would be lifting restrictions across Europe had some impact on the trading of EUR, similar figures were shown with GBP as yesterday Boris Johnson announced that an easing of restrictions would begin on Monday.

The USD had been relatively stable throughout the spread of the coronavirus, but many fear this may not last as the efforts taken within the US to curb the spread currently seem to be ineffective as numbers are still growing at an alarming rate.

Until there is a widespread level of stabilization, the forex market will continue to be bearish as prices remain volatile, but as further news begins to spread regarding lockdown measures, recovery may also start to speed up too.

European Markets

Following a day of heavy selling at the start of the week, European markets seem to be finding a small recovery – the FTSE 100 has been seeing small bumps as well as the French CAC and German DAX – all three have been seeing days of a 1.5% rise.

Again this recovery may be attributed to the short term news regarding movement restrictions, but if the good news in that area is expected to continue, then this may also pass on to the markets that correlate in operation too.

Early signs show that predictions of a V-shaped recovery in the markets is the most likely outcome as the early signs of recovery are here but many still fear the risk of a second peak in spread as lockdown measures are lifted – all eyes will be on early adopters to see how recovery is going, if signs continue to show good news then recovery may be fast – if any downward trends start however it could spell signs that a much longer U shaped recession may be on the way and bring to light the fears of a recession that many leaders were trying to avoid.