Daily summary: Risk appetite returns due to higher oil prices

• Oil prices rise for the fifth consecutive day
• European stocks finished session higher despite German Court ruling
• US stocks rise as several states are planning to lift restrictions

European indices finished today's trading session in the green,  thanks to rising oil prices and hopes that fuel demand will increase as more countries are lifting restrictions. In the morning Germany's top court said the ECB's bond purchases scheme partially violates the constitution and raised objections to the Bundesbank's participation in it. ECB has three months to show the Public Sector Purchase Program is needed or the Bundesbank will stop its participation in it. Still, the court ruled that the ECB’s purchases of public sector debt between 2015 and 2018 were legal. DAX gained 2.5%, CAC 40 advanced 2.3 % and FTSE 100 finished 1.7 % higher.

US indices also jumped on Tuesday as a recovery in oil prices lifted battered energy stocks. The S&P 500 (US500) managed to recover about 30% of its recent losses, thanks to  unprecedented stimulus measures and signs of a plateau in new COVID-19 cases in many parts of the world. "There's a growing sense that the worst for the global economy is right now, while lockdowns are in place and coronavirus treatments are unproven," "It follows that it only gets better from here as lockdowns ease and treatments are found." said Jasper Lawler, head of research at London Capital Group. However other experts have warned that recent upward movement may collapse if there is a second wave of infections and with growing evidence of the damage to the economy and corporate America.

Today's data showed the domestic services sector recorded its first contraction in nearly 10-1/2-years, while the ISM non-manufacturing index showed a smaller-than-expected decline. During today's session Dow Jones rose 1.28%, S&P500 advanced 1.56% and Nasdaq is trading 1.76% higher.

 

When it comes to macroeconomic data, investors will focus now on the nonfarm payrolls report which is due on Friday. ADP employment change is the main data release scheduled for tomorrow. Analysts’ are expecting largest decline in history namely 20 million drop in April. That would be a loss of decade’s worth of jobs in one month. Tomorrow's figures will be important as ADP is the key indicator for non-farm payrolls on Friday.

Besides that, investor’s will get to know unemployment figures from New Zealand and retail sales data from Australia.  Oil traders will be looking at EIA inventory numbers. Tomorrow services PMI data from the countries across the Europe will also be published. On the earnings front PayPal, T-Mobile US Inc, BMW AG, General Motors will publish their quarterly results.

OIL (OIL.WTI) price managed to break above major resistance level at $23.63 per barrel. Should upbeat moods prevail, resistance at $29.61 may come into play. Source: xStation5

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