• The Russian ruble soars higher
• Dollar retreats slightly
According to the new OPEC+ deal first cuts could be expected in May-June. All members would lower their production by 23%, with Saudi Arabia and Russia each cutting 2.5 million bpd and Iraq cutting over 1 million bpd. This would be followed by additional cut of 8 mln bpd from July to December 2020 and 6 mln BPD cut from January 2021 to April 2022. Saudi Arabia and Russia decided that their cuts would both be calculated from an October 2018 baseline of 11 million bpd.
The Russian ruble has been strengthening since the beginning of April to reach $ 73.76 today, a level not seen since mid March. The dollar index dropped to around 99.4 on Friday and was on track to post a weekly decline after the Fed’s announcement further stimulus package worth $2.3 trillion. Expectations that the coronavirus pandemic is reaching its peak prompted investors to seek riskier assets. So far this week, the dollar fell 1.1%.
Annual inflation rate in the US fell to 1.5% in March of 2020 from 2.3% in February and slightly lower than market expectations of 1.6%. It is the lowest inflation rate since February of 2019, mainly due to a 10.2% slump in gasoline costs (5.2% in February) and a 1.6% drop in apparel prices (vs -0.9%). On a monthly basis, consumer prices fell 0.4%, after a 0.1% gain in February and worse than expectations of a 0.3% decline. It is the largest monthly drop since January of 2015. Core consumer prices rose 2.1% year-on-year but fell 0.1% month-over-month, its first monthly decline since January of 2010.
Trading on Easter Monday will be muted as many markets are shut for holidays. Therefore traders should expect reduced liquidity.
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