Report

GOLD: TO SHINE BRIGHTER

COVID-19 Acceleration in number of new cases in Spain and the UK. Number of cases has passed 1.5 million in the world. Economy France : 6% contraction of Q1 GDP according to BdF estimate. World : WTO predicts global trade will shrink between 13% and 32%. Policy responses US : Democrats propose new stimulus plan in excess of $500bn. EZ : EU Finance Ministers fail to agree on €500bn fiscal package to mitigate impact of health crisis. Financial markets Money : further easing for nonfinancial CP. Credit : further tightening of iTraxx indices (taking X-Over to 536bp). Outperformance by property developers in cash market (1.6-4.2 figure rise in prices for Unibail, CPI Prop, etc.). Capgemini placed €3.5bn at 50bp-80bp NIPs that was oversubscribed by 4.7x on average. Equities : SXXE unchanged at close, out of negative territory for 3rd consecutive session. SPX gains 3.4%, +23% since March 23rd (68% of the max drawdown now retraced) . V2X stable at 45%. As for divs, Dec 20 future extended rebound to 64.4 (up 6% yesterday, up 22% over 3 sessions). FX : EUR/USD down 0.3% to 1.086 after Eurogroup meeting ended without an agreement. Unexpected monetary easing by Polish central bank. Focus Just as the global economy was starting to shut down and equity markets were in freefall, gold prices tumbled by $210/oz (or 12.5%) in the space of ten days, which might have seemed rather surprising. After all, the precious metal is supposed to be a safe haven. But then, this was not the first time that gold was caught up by the law of gravity even as equity markets were plumbing new depths.
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Natixis
Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

 

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