• Equity bulls back in charge
• US Crude Stocks Fall the Most in 5 Months
• Gold nears 8-year high
• US Crude Stocks Fall the Most in 5 Months
• Gold nears 8-year high
Positive moods prevailed among investors during today’s trading session despite the fact that doubts over a potential coronavirus vaccine mounted after STAT reported that Moderna (MRNA.US) did not make available enough data to assess if the new vaccine is effective. Sentiment was supported by hopes of a rapid economic recovery in the United States. Donald Trump and Steve Mnuchin pointed out that the US economy should experience a huge rebound in the third quarter. Also markets welcomed encouraging signs of economic activity during the pandemic after Lowe's (LOW.US) reported better than expected quarterly results and Target (TGT.US) online sales soared 141% in the first quarter. It seems that some of the market participants ignored Fed Chair Jerome Powell, who once again warned that the economic outlook is not so optimistic. However, Powell also pointed out that a weak economy may need more supportive tools. This could already be considered by markets as a preview of another influx of almost free cash. Therefore the FOMC meeting minutes which will be released later in the day may not be as important. Today Wall Street's main indexes surged. Dow Jones rose 1.33%, S&P 500 is trading 1.49% and the Nasdaq added 1.59 % and is currently trading at levels not seen since February.
European indices finished today’s trading session higher. Investors are waiting for further information regarding EU common recovery plan, after Austrian Chancellor Kurz announced yesterday that a group of members will present a counter-proposal to the Franco-German coronavirus Recovery Fund plan. Meanwhile Bank of England Governor Andrew Bailey said that negative rates weren’t ruled out, echoing recent comments by fellow policy-makers. DAX 30 climbed more than 1.0 %, CAC 40 advanced 0.82 % and FTSE finished 1.1 % higher.
China's economy is also showing signs of recovery. Sales are increasing, primarily in the automotive sector. It turns out that about 1.5 million cars were sold in April, roughly the same as last year. This is a clear improvement compared to the beginning of the year. However, it is worth remembering that China, at least according to the official data, has significantly fewer coronavirus cases compared to the US or some European countries. However, investors should remember that China is renewing lockdown restrictions after new coronavirus clusters were found in Wuhan and Shulan, 2 cities hundreds of miles apart. This may have a negative impact on the May macroeconomic readings.
WTI crude oil price surged above $32 per barrel, while Brent rose above $ 35 per barrel after EIA data showed US crude inventories fell by 4.983 million in the latest week, the biggest drop so far this year . Today’s data show that demand is slowly returning to normal.
Gold is trading around $ 1,750 an ounce since, supported by hopes of further monetary policy loosening and by the weakening US dollar, which dropped to its lowest level in nearly three weeks.
A lot of PMI readings will be released on Thursday. US unemployment claims and Flash Manufacturing PMI are key readings scheduled for tomorrow. Apart from that, Fed Chair Powell and RBA Gov Lowe are scheduled to speak. On the earnings front NetApp Inc (NTAP.US) will report it’s quarterly results.
NZDUSD is testing major resistance level at 0.6154 which is additionally strengthened by 100 day MA (green line). Kiwi is one of the top performing major currencies during today's trading session. Should upbeat moods prevail, next resistance at 0.6364 may come into play. On the other hand, if sellers will manage to regain control then downward move towards 0.5915 may be launched. Source: xStation5
