Stock markets and forex forecast: spring increases possible, euro stable or slightly higher

62% of the operators aim for a consolidation of the recovery trend, the party of the pessimists is reduced to 28%, nut more than half are convinced that the current stimuli at European level are not enough; the EUR / USD exchange rate is not expected to change significantly over the next few weeks.

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After the collapse of the financial markets recorded in the first weeks since the outbreak of the coronavirus pandemic, the upward trend in the stock exchanges that has emerged over the past few days could last and consolidate over the next few months. This is what is believed by the majority of operators associated with Assiom Forex: if a month ago 52% foresaw in fact decreases, now this percentage drops to 28% (a 17% that sees declines in the order of 3-10% and a further 11 % seeing double-digit declines).

On the other hand, the percentage of optimists rose significantly to 62%, more than doubled compared to 30% in the previous survey. Of these, 39% expect moderate increases between 3% and 10% while the remaining 23% see double-digit increases. Consequently, the percentage of those who see stable markets (between -3% and + 3%) falls from 18% to 10%.

The chances of a market rebound increase, but the ECB’s stimulus may not be enough

“The data emerging from the survey conducted in the last weeks of last month seem to show a two-faced situation” – commented the president of Assiom Forex, Massimo Mocio. On the one hand, in fact, the operators point to the fact that, at current levels and after the huge losses in the past six weeks, valuations are now very attractive to investors and the chances of a rebound increase.

However, we know that this single element, in the absence of important positive news on the reduction of the infection, may not be sufficient to engage a lasting recovery, especially in the presence of the ongoing lockdown that forces many companies worldwide to stop production. This explains, therefore, the relative underlying skepticism with which the interviewees seem to have accepted the extraordinary measures put in place by the ECB and the European Commission, deeming them insufficient to guarantee long-lasting effects.

The stimulus measures implemented so far by the ECB and the European Commission, for example with the suspension of the stability and growth pact, are not sufficient to significantly mitigate the impact of the coronavirus crisis on markets and the economy. According to 60% of operators, we have now entered a severe recession and it will take more effort and time to get out of it.

For the remaining 40%, however, action was taken in a timely manner and with the decision and the health emergency over, there are the foundations for recovery. Much will obviously depend on the outcome of the negotiations underway at the Eurogroup for the implementation of new measures (from the activation of the Mes to the intervention of the Bei up to the coronabond hypothesis) and on the timing of the transition from the maximum emergency phase to the so-called phase 2.

EUR / USD stable or slightly higher for 73% of operators

With central banks committed to providing support to their respective economies with every monetary policy tool at their disposal, the performance of the Euro-dollar should not change significantly over the coming weeks. 73% of traders believe that the euro will remain stable (40%) against the dollar or post a slight rise (33%). On the other hand, only 6% believe that the single currency can go up significantly after the bearish trend of the last few weeks while a further weakening is put into the estimate by 21% of operators. Very obviously it will depend not only on the monetary policies of the respective central banks but also on the duration and impact of the crisis triggered by the coronavirus on their respective economies.

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