Daily summary: Global equity markets seek direction

• European indices finished today’s session mixed
• US inflation falls to 0.3 %
• Wall Street swing between gains and losses

Today's European session began in mixed moods due to worse moods in Asia, which was related to China's retaliation towards Australia. China has suspended some beef imports in response to critical comments from Australian politicians about Beijing. Also Wuhan officials reported first cluster of coronavirus infections since a lockdown on the city, stoking concerns of a wider resurgence. In addition, President Trump said he did not intend to negotiate the terms of the trade agreement with China. However, despite the bad news, some of the major stock indices on the Old Continent finished today's sessions in green. The London FTSE 100 added 1.1%, the Italian FTSE MIB gained 0.9 % Spanish IBEX 35 grew 1.6 %. Indices in France or Germany did not perform well, where the French CAC40 lost 0.4% and the DAX closed 0.08% lower.

According to Reuters OPEC and its allies want to maintain existing oil cuts beyond June when the OPEC + group is next due to meet to shore up prices and demand, which has been hit by the coronavirus pandemic, four OPEC + sources said on Tuesday.  "The ministers want to keep the same oil production cuts now which are about 10 million bpd, after June. They don't want to reduce the size of the cuts. This is the basic scenario that's being discussed now," one OPEC+ source told Reuters. WTI crude futures touched a session high of $25.79 and Brent was trading above $30.00.

The moods  during today's US session are cautious, after leading US infectious disease expert Anthony Fauci  warned Congress that development of the vaccine against the new coronavirus "might take some time" to come to market. In Doctor’s Fauci opinion,  moving too quickly to ease restrictions on business and social life will put lives at risk from the pandemic and hamper the economic recovery. 

Also market moods worsened after publication of today’s US inflation data. Consumer prices dropped by 0.8% last month after a 0.4% drop in March, while core consumer prices fell for a second-straight month. Based on today's readings some investors consider that the first impact of the pandemic on prices will be deflationary. During today’s session Dow Jones and S&P 500 are trading flat, while Nasdaq rose 0.50%

Today President Trump has again called on the FED to lower interest rates below zero "As long as other countries are receiving the benefits of Negative Rates, the USA should also accept the “GIFT”. Big numbers!" Trump tweeted.   In response, gold prices rose and treasury yields dropped, although they remain comfortably off the last week lows. The dollar index also fell by 0.4% to trade back below 100 which  is usually a good sign for gold. However President Trump faces strong opposition from the Fed when it comes to introducing negative interest rates.
"I would be against negative interest rates," Dallas Fed President Robert Kaplan told CNN International. "I’m a skeptic whether negative interest rates would actually be helpful, or whether the help would be outweighed by the harm it would do to the financial sector."

After financial markets began pricing in negative U.S. interest rates for the first time ever last week, all eyes tomorrow will be on Federal Reserve Chair Jerome Powell's outlook on the economy at a webcast event. During the Asian session RBNZ will present its decision regarding interest rates, after which the RBNZ governor will hold a press conference. Analysts expect the bank will leave interest rates unchanged. Besides that investors will get to know  GDP and manufacturing production data from the UK. Oil traders should pay attention to the EIA Cushing Crude Oil Stocks change.

USDCHF  bounced off the upward trend line and broke below local support level at 0.9687. Should downbeat moods prevail, support at 0.9585 may come into play. Source: xStation5