Amidst the chaos of COVID-19 crippling global indices and economies, the plunge in oil prices this morning (9 March) sent a shockwave through the global index futures market. The US futures market saw the rare occurrence of a limit down, where prices tested the futures limit prices and would not able to be traded below until cash markets open at 9.30pm tonight – a strong indication that the markets are still fearful of the economic impact the COVID-19 epidemic will bring.
The cautious behaviour of the markets has sustained throughout the day, and could further worsen when the US cash markets open later tonight. Markets are fraught with heightened fears over the spread of COVID-19 cases outside of China, and the oil-price war from the OPEC deal failure further adds to the growing list of market worries.
A sell-off in all asset classes is seen at present. Not only did the US 10-year Treasury yield fall to record lows below 0.5%, global indices and oil are also facing multiple blows as investors exit their positions to remain risk-averse amidst the uncertainty shrouding the global economy.
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