European markets posted slight rebounds after the heavy losses they recorded yesterday when they fell to May levels due to new restrictions to deal with the COVID-19 pandemic. Caution has been imposed on the main stock indexes, with minimal increases, not exceeding 0.3%, pending the monetary policy meeting of the European Central Bank (ECB) and the subsequent appearance of Christine Lagarde.
Although no major announcements are expected at the ECB meeting, Lagarde is expected to offer clues about the measures that the body is expected to adopt in December to alleviate the economic effects of the COVID-19 pandemic.
Investors are also awaiting growth data on the GDP of the United States in the third quarter. An increase of around 32% is expected after the historic drop of 31.4% in the second quarter. Wall Street futures also point to slight increases, along with Europe, while waiting to get the GDP data. Yesterday, the main US indices fell more than 3%, in line with Europeans.
In this context of uncertainty and fear of the effect of the new confinements in Europe, the VIX volatility index maintains its upward trend and is close to 40 points. This psychological threshold of 40 points has only been exceeded 6 times, in moments of panic such as after the 9/11 attacks or after the outbreak of the financial crisis. The last time was in March 2020, when the COVID-19 pandemic was declared.
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Source: Admiral Markets MetaTrader 5. VIX Futures CFD Chart. Data range: February 26, 2020, to October 29, 2020. Prepared on October 29, 2020, at 12:20 p.m. Keep in mind that past returns do not guarantee future returns.
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