ZFX: Second wave of pandemic becomes key focus for investors again

The second wave of the coronavirus outbreak in the US is still deteriorating, turning the market back to a bit bearish condition. Stocks in Asia Pacific region generally fell on Tuesday, following the momentum of Monday’s drop of the US stocks, despite the hopes of vaccine.

Investors are worrying that the economic recovery will slow down, if the cities in the US implement lockdowns again.

The dollar was marginally higher, reflecting the cautious sentiment. From the mid of March, it is obvious that the dollar’s trend has a negative correlation with the stock markets

ZFX analyst Jacob Leung said that, it seems to be the risk-off mode, hitting the demand for riskier assets. However, based on the previous move, it is expected the reversal may be just in short term.

Investors are also closely watching the growing tensions between China and the US. President Trump said last week he would not discuss the phase 2 trade deal with China and this week it is very likely that some more actions will be taken from the US side.

ZFX analyst Jacob Leung said that, so far the markets are all relatively stable under the current situation. Even we all know the China-US tension can be seriously affecting the market sentiment, risk appetite over the last few weeks was strong enough to make the rally of the stock markets.

Risk Warning: The above content is for reference only, and does not represent ZFX’s position. ZFX does not assume any form of loss caused by any trading operations carried out in accordance with this article. Please be firm in your thinking and do the corresponding risk control.