Daily summary: Risk appetite returns to global financial markets

• Wall Street hopes for a quick restart to the U.S. economy
• European stock end the session with mixed results
• Gold prices soar to multi-year highs

European indices finished mixed at the end of another volatile session on Tuesday, after  China's exports and imports figures fell much less than expected in March as factories resumed production after the authorities began to lift the lockdown restrictions. Also sentiment has improved after few countries showed signs that the outbreak may have peaked on their territories. President Emmanuel Macron announced that France would return to normal life on 11 May if the number of new infections falls by then. On the other side, accordingly to the IMF the global economy may suffer its worst recession since the Great Depression of the 1930s and shrink 3% this year.
The DAX 30 rose 1.6%, CAC 40 gained 0.5% and the IBEX 35 advance 0.5%, while the FTSE 100 lost 1% and the FTSE MIB went down 0.5%.

US indices are trading  higher during today’s session as the earnings season kicked in with mixed results: quarterly earnings from JPMorgan Chase and Wells Fargo came below expectations while earnings for Johnson & Johnson beat estimates. Meanwhile, investors are still trying to assess the spread of coronavirus. As of today, nearly 591,000 confirmed cases have been reported in the US, of which over 24,500 have died. Yesterday, New York Governor said “the worst is over if we continue to be smart going forward” and accordingly to President Trump said that growth in new coronavirus infections stabilized. Dow Jones advanced 2.21%, S&P rose 2.58% and Nasdaq is trading 3.45% higher.

 

Oil futures dropped approximately 5% as investors are not convinced that the recently announced production cuts will be enough to match the fall in oil demand. Earlier, Saudi Arabia’s Energy Minister said that the country was ready to reduce oil production even further if necessary after OPEC and other major oil-producing countries agreed during the weekend to cut a record 9.7 million barrels a day in May and June. Also, the US EIA forecast crude oil production in the US is likely to decline by 183,000 barrels a day in May.

 

Precious metals continue their upward movement. Today gold went up 1.3% and broke above the recent seven-year high made just over one month ago. Silver gained 2.26%.

 

US retail sales figures and Bank of Canada rate decision are main data scheduled for release tomorrow.  Investors will also get to know the level of US crude oil inventories.

USDCAD is trading around critical 1.39 support level. A close below it could encourage sellers to press towards 1.37. Further close below that level may send the price even lower towards 1.35. However if the bulls manage break above the trend line then the currency pair may be heading towards  1.4289. Source: xStation5

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