• 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.
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