• Oil prices dropped due to oversupply concerns
• BOC leaves interest rates unchanged
Wall Street is trading lower today as recent data have shown that the coronavirus pandemic has strongly impacted the US economy as retail sales fell at a record pace in March; industrial production has been shrinking the most in 74 years; and the Empire State manufacturing index in New York has fallen to its all time lows. The earnings season continued with earnings from Bank of America and Goldman Sachs disappointing although Citigroup results came better than expected.
Crude oil prices continue to fall after the International Energy Agency (IEA) published its April oil market report and warned of falling demand due to the coronavirus pandemic which would far exceed the agreement of major oil producing countries to cut production by record 9, 7 million barrels a day. The moods worsened even further after the publication of the EIA report which showed a record increase in the US oil inventories for the second week in a row. This came in line with the API data released yesterday, which showed the largest increase in inventories in over three years. WTI oil dropped by 2.6% to $19.6 per barrel, after hitting the lowest level since 2002. Brent fell almost 7% to $27.5 per barrel.
Recently gold started to act like a risk asset, falling today together with oil and stocks while other safe haven assets like bonds and US dollar strengthened after publication of the weak economic data. Gold futures dropped 1.68% and silver futures fell over 3.5%.
Unemployment claims from the US are the main release scheduled for Thursday. The US labor market is under severe stress right now with Americans flooding labor departments with jobless claims. Initial claims jumped to 6606k last week and market consensus points to a 5350k print this week. However, traders should keep in mind that US stock market saw mixed reactions to the previous readings.
Besides that investors will get to know US building permits figure, Philly Fed Manufacturing Index reading and BOE Credit conditions survey. During Asia session unemployment figures from Australia will be released. Morgan Stanley will also publish results for the first quarter. Of course the coronavirus remains in charge of global markets therefore investors should follow the news flow closely.
AUDUSD – Aussie has significantly strengthened against the US dollar over the last few days, however today the currency pair could not break above the important resistance at 0.6457. Traders should pay attention to the figures from the Australian labor market which will be published late at night. A much worse reading may reverse the current upward trend. The local support can be found at 0.6208. Source: xStation5.The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
