Daily Report 06.03.2020

Mercados financeiros voltam a contrair com expansão do vírus

• Financial markets tumbled yesterday amid increasing cases of coronavirus and governments extending quarantines and travel restrictions. Investors searched again for safe haven assets and stock indices declined in advanced economies while yields on sovereign bonds fell (this morning the yield on the 10-year U.S. Treasury bond reached 0.81%).
• In FX markets, safe currencies such as the Japanese Yen and the Swiss Franc strengthened due to the risk-off mood while the euro appreciated against the U.S. dollar and fluctuated above $1.12 (a level not seen since early January).
• In oil markets, the price of the barrel of Brent declined towards $50 despite the OPEC's announcement of a higher-than-expected additional cuts in production of 1.5mb/d until June. Nevertheless, it is not clear whether OPEC allies, led by Russia, will back these cuts today (1mb/d are assigned to OPEC members and 0.5mb/d for its allies).
• Today the focus will be on February's U.S. employment report.