Daily summary: European stocks fall as coronavirus crisis deepens

 

Most of the major European indices finished today’s session lower as investors remain concerned about the negative impact of the coronavirus pandemic on the economy.  The number of people infected with the coronavirus across the world rose towards 1.5 million and recent data in Europe and the US suggest it’s still too early to assume the outbreak is controlled. The daily death toll in Spain rose again and France became the  fourth country which reported more than 10,000 deaths. The number of infections in Germany exceeded 109,000. Moods in the markets further worsened, when European finance ministers' announced that they could not reach an agreement regarding coordinated economic support package. DAX finished 0.23 % lower, FTSE 100 declined 1.44% and CAC40 edged 0.1%.

 

Quite different moods prevail in the US markets today. Investors welcomed the fact that researchers at the University of Washington estimated, that the actual death toll from the corona virus might be lower than previously thought and limited to about 60,000, while the US government warned of over 100,000 possible deaths.

Senator Bernie Sanders dropped out of the 2020 presidential race today, ending an unprecedented Democratic primary and setting up a general election between President Donald Trump and former Vice President Joe Biden.

Dow Jones went up 2.66%, S&P 500 is trading 2.56% higher and NASDAQ rose 2.22%.

Oil prices rebounded in another volatile session today, as investors hope that new production cut deal might be reached during tomorrow OPEC+ meeting. However some doubts remain as to whether the US will support the deal by reducing its own production. Accordingly to the latest EIA report,  US crude inventories rose more than 15 million barrels in the week ended April 3rd, the biggest one-week rise in crude inventories since the series began in 1982  and well above market expectations of a 9.271 million. During today’s session WTI rose over 3% and Brent went up over 1.2%.

The dollar index pared earlier gains to trade around 100.00. S&P Global Ratings cut Australia’s credit-rating outlook to negative from stable mentioning an expected rise in public debt and the first recession in almost 30 years. Australian parliament returned on Wednesday to pass an emergency AUD 130 billion stimulus package that will help pay the wages of an estimated 6 million Australians during the coronavirus pandemic and economic downturn.

The Reserve Bank of New Zealand announced on Tuesday that it would buy up to NZD 3 billion of local government debt to ease liquidity strains in the market as part of the measures to support the economy from the coronavirus pandemic.

Both Kiwi and  Aussie managed to erase early losses and are trading respectively 0.68 % and 0.81% against US dollar.

 

Thursday calendar is full of macroeconomic data releases. All eyes will be on the upcoming OPEC+ meeting where major oil producers will be looking to provide stabilize the oil market via a coordinated production cut. Consequently, headline risk will be notably elevated for crude futures. In the afternoon investors will get to know  ECB Monetary Policy Meeting Accounts . Later market attention will focus on the US Unemployment Claims reading and data from the Canadian labor market. Next Federal Reserve Chair Jerome Powell is scheduled to speak.