The atmosphere is gloomy again on the markets. The Paris Stock Exchange plummets by more than 3% at the end of the morning to 5200 points. Since the start of the year, the CAC 40 has now lost more than 13%. The other large European squares unscrew in unison. Milan lost 3.15%, Frankfurt more than 2.8% and London 2.5%.
The bad wind came from Wall Street, which fell 3.5%. It then spread to Asia: Tokyo ended up falling sharply and Chinese markets opened sharply down.
Concern about the spread of the coronavirus continues to produce its harmful effects. The various measures taken worldwide to stem the coronavirus epidemic fail to reassure investors.
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After the Federal Reserve's (Fed) rate cuts, Canadian and Australian central banks followed suit. The governor of the Bank of England (BoE), estimated Thursday that the institution had "still a lot of ammunition" to face a financial crisis, despite already very low interest rates. Now, all eyes are on the European Central Bank (ECB) which is holding its monetary policy meeting next Thursday. The fact remains that the ECB, which already applies minimum or even negative rates, does not have the same room for maneuver as the FED.
In addition, the monetary weapon is a double-edged sword. While the fall in the rent for money is generally a driver for the equity markets, it can also be seen as a sign of a deeper than expected deterioration in the economic outlook. The Fed's boost has already fizzled.
Governments are now taking out the fiscal weapon. Italy, the first European center of contamination, has set up a 7.5 billion euro plan to deal with the epidemic and its consequences. In the United States, $ 8.3 billion is released to finance an emergency plan. In France, the Minister of the Economy, Bruno Le Maire estimated that "budgetary policy measures are necessary in a world where the room for maneuver of monetary policy is reduced".
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For its part, OPEC hopes to convince its Russian ally in Vienna on Friday to further reduce black gold production, in the hope of halting the fall in crude oil prices. A barrel of Brent has dropped to less than $ 50 in the past few hours. Since the start of the year, it has lost a quarter of its value.
