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Oil has collapsed to a minimum since early 2019

UNITED STATES (OBSERVATORY NEWS) — Brent crude prices fell below $ 53 – the first time since the beginning of last year. The collapse of quotations does not stop. Each new message about the spread of coronavirus in different countries causes a new wave of sales.

This is not surprising, because the work of factories stops, because of prohibitions, supply chains collapse, and the global economy risks slipping into a recession.

As a result of Wednesday, losses in the oil market amounted to another three percent, although during the session quotes tried to enter positive territory. However, now they have gone even lower.

The virus has already reached Brazil. The main index of the exchange in Sao Paulo collapsed by 7% – the maximum drop in three years. Against this background, the local currency managed to renew a new historical minimum, and even the Central Bank interventions could not fully compensate for the fall. Real Madrid lost a little more than 1% at the end of the session.

Meanwhile, on Wall Street, investors are fleeing again.

They use any rise in quotes as an opportunity to exit stock assets. That is how events developed in the past session. At first, the indices grew, but at the end of the day they went negative, and only Nasdaq finished the day in a symbolic plus.

However, today, with the opening, futures for US indices are losing more than half a percent. In total, from the beginning of the week, the decline amounted to almost 10%. Bidders are hoping for support from the Federal Reserve, but Jerome Powell and his team are in no hurry to lend a helping hand.

The printing press works, in fact, idle. The balance of the American central bank is not growing. And although the Federal Reserve continues to buy back Treasury bills by issuing money for $ 60 billion a month, banks have recently repaid repo loans issued in September-December last year.

“Now we can only guess whether the Fed will lower the rate. But I believe that the Fed will do everything necessary. If officials believe the economy will suffer from a virus outbreak, the Fed will cut rates right now, ”Bankrate.com senior analyst Mark Hamrick shared his opinion with AP.

Moreover, the Treasury, in turn, withdraws money from the system at a record pace, increasing borrowing. Over the past four weeks, the US Treasury Department issued bonds for $ 264.4 billion, which is 52 times higher than in January. The next meeting of the regulator will take place only on March 17-18. And during this time, markets may fall even more.

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