COVID-19, Fund Agreement in Focus for Global Markets
Three biopharmaceutical firms all released their own potential vaccines for coronavirus on Monday. Meanwhile, the European Union finally agreed on a compromise for their COVID-19 recovery fund. Both events are pushing the global markets upward in the near term.
In fact, DAX futures contracts in Germany traded 1% higher in early trading, and FTSE 100 futures traded up by 0.7%. Meanwhile, French CAC 40 futures also climbed by 0.8%.
The European Union has been having an extended discussion about the recovery fund. After five days, the leaders agreed on cutting the 750 billion-euro proposal down. Instead of issuing 500 billion euros in grants, it would then require 390 billion instead.
The remaining funds would then be used in repayable loans.
EU Council President Charles Michel told investors that the total would remain at 750 billion in euros. The biggest change held on Monday was merely the ratio between loans and grants. Leaders not in the Frugal Four remain determined to keep the total as it is.
With settling the agreement came the seven-year one trillion-euro EU budget proposed prior to the pandemic. This assistance was originally to allow for the bloc to take its part in helping ease climate change.
Euro Stoxx 50 futures also lifted up by 0.25% in early trading, near to its highest since early March.
US Markets, Optimistic Towards Potential Vaccines
Investors are hoping for another economic package with surging coronavirus cases in the United States. White House advisers are expected to discuss the next step in their coronavirus response on Tuesday.
Global markets are looking forward to a possible package on top of the $3 trillion in stimulus seen beforehand.
According to a market strategist at Mizuho Securities, the US will most likely adopt a $1 to $1.5 trillion stimulus. This could start by early August.
Promising early data from trials of COVID-19 vaccine candidates added onto stock trading today. The NASDAQ Composite jumped up by 2.51% in Asian trading, nearing its four-month peak.
Giddy US markets are looking forward to the possibilities of recovery brought by the potential vaccines by the end of 2020. This optimism is bound to help American equities. That is, unless, the earnings season gives the world another reality check within weeks.
Now at 609,000 deaths worldwide and counting, global markets are relatively more focused on the vaccine. Namely, the drug giant Pfizer, the German company BioNTech, and biotech giant Moderna all revealed their respective results this week.
North Korea just announced that it plans to join the vaccine race as well.
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