Snapshot – 25th March

25th March 2020

Global equities are up for a second consecutive day, although today’s gains have so far been less vertiginous than yesterday’s.

The main driver has seemingly been reports that Democrats and Republicans (and the White House) have reached a deal on an unprecedented $2 trillion fiscal package on which the Senate is due to vote on again today, having failed to reach a majority in recent votes. The S&P 500, which surged 9.4% yesterday – its largest one-day percentage gain since October 2008 – is up about 3% at time of writing.

Major currencies have been volatile in the past 24 hours, appreciating against the Dollar overnight, giving back some of their gains around lunchtime before staging a recovery late this afternoon. Sterling has been particularly edgy, with the GBP/USD cross – potentially helped by data showing that UK CPI-inflation was broadly unchanged in February – threatening to break through 1.20 this morning. Cable then collapsed below 1.17 this afternoon but has in the past hour bounced back to around 1.185.

Trying to decipher which underlying factors markets are attaching the greatest weight to at any one point in time remains an exercise fraught with difficulty given the never-ending stream of coronavirus-related news.