Daily summary: Oil prices on record low

• WTI oil price plunged 40%
• US indices mixed in volatile session
• Gold trading around $1700 an ounce

 

European indices finished today session in mixed moods. German Chancellor Angela Merkel announced that the next EU budget would probably be bigger than that which was planned before the outbreak of the coronavirus pandemic, and that Europe's largest economy was ready to commit in finding answers of solidarity that go beyond the €500 billion package already agreed. European leaders are set to meet later this week. DAX gained 0.4%, CAC  rose 0.7%, FTSE100 edged up 0.5%, FTSE MIB finished flat and IBEX 35 declined 1%.

US indices are trying to recover early losses.  Amazon and Netflix are one of the top performs. However energy shares plunged after the May future contract for WTI crude which expires tomorrow, fell more than 50% to a record low and the new benchmark contract, for June, dropped over 8% amid signs of sustained oversupply for the next couple of months at least. Investors are concerned that storage facilities in the US, especially at Cushing, Oklahoma, will run out of capacity. Markets also have doubts regarding Trump administration's plans to re-open the economy as the coronavirus pandemic showed no signs of easing. During today’s session. Dow Jones  dropped 0.81%, S&P 500 lost 0.34% and Nasdaq rose 0.35%. Crude Oil dropped to9.55 USD/Bbl

Gold prices went higher today and tested $1,700 level as investors are concerned whether the rally in equities can be sustained. Also the situation on the oil market support safe-haven assets. Silver futures gained 1.9% to $15.78 an ounce and platinum futures advanced 1.9% to $800.40.  Platinum price rose thanks to positive news from the global auto industry: Germany’s Volkswagen (VOW1.DE)) and Daimler (DAI.DE) both reopened some factories  today. German government also allowed car dealerships to reopen for the first time in over a month.

 

There are no market moving macro reports scheduled for release tomorrow. During the Asian session Minutes from the recent RBA Meeting will be published and later on RBA Governor Lowe will give a speech in Sydney which may cause some price movement. Next investors will get to know German ZEW index reading  and Existing home sales figures from the US. On the earnings front Coca Cola Co (KO.US)., Netflix (NFLX.US), Philip Morris Inc. (PM.US), Lockheed Martin Corp(LMT.US) will post their quarterly results tomorrow.

AUD/USD gained today and is trading around $0.64, as the number of new infections has been declining in country’s three most populated states. The government may ease some minor restrictions when the national Cabinet meets later this week. Aussie trades in a range between 0.6208 and 0.6457. Perhaps Governor Lowe's speech tomorrow will cause the price to break out of the consolidation area. 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.