• Oil Prices fall on demand concerns
• ADP report showed 20.2 million drop in private payrolls
• European stocks close lower on weak data
• ADP report showed 20.2 million drop in private payrolls
• European stocks close lower on weak data
European shares closed lower today, after the European Commission latest economic forecasts showed the Eurozone economy might shrank by a record 7.7% this year due to the coronavirus pandemic. Also German industrial orders and Eurozone's retail sales fell at record rates. DAX 30 declined 1.1%, CAC 40 dropped 1.3 % and FTSE 100 rose only 0.1 %.
US indices are trading mixed. The S&P 500 and Nasdaq gain amid hopes of a pickup in business activity as states are planning to ease coronavirus-related lockdowns. However Dow Jones index came under pressure from declines in oil giant Chevron Corp (CVX.US) as crude prices fell. The S&P 500 energy sub-index dropped 2.2%. Also investors are trying to digest a record 20 million drop in U.S. private payrolls last month. During today's session Dow Jones lost 0.02 %, S&P500 rose 0.14% and Nasdaq gained 1.22%
Macroeconomic data still point to a serious global recession, analysts warn of further declines, especially if the reopening of economies causes another wave of infections. "We knew this was going to be bad, so it matches the jobless claims. A lot of the bad news for April is pretty much factored in," "But markets are looking at a potential recovery here, we've got a lot of states opening up. Businesses are starting to get going again, but the question is, is it too fast?" said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
Oil prices overlooked recent bullish EIA Crude Oil Stocks inventory report as markets took a breather after the recent huge rally. Oil inventories rose by 4.6 million barrels for the week ended May1, the EIA said. That compared with expectations for a build of about 7.8 million barrels. Inventories at national storage hub at Cushing, Okla., increased by 2.07 million barrels, which is the lowest increase in six weeks. However WTI futures dropped 5.4% to $ 23.23 and Brent fell over 6.0% at $ 28.90 amid concerns about oversupply and falling demand after weak ADP data.
Gold dropped below $1,700 and is trading in the consolidation zone for the last five weeks despite a steady flow of funds into gold-backed exchange-traded funds. Holdings in SPDR Gold Trust (GLD), the world’s largest gold-backed ETF, rose 0.4% to 1,076.39 tons on Tuesday, their highest since April 2013.
US Unemployment Claims is the key reading scheduled for tomorrow. Analysts expect a reading of around 3000k compared to 3839k from last week. Besides that, investor will get to know Bank of England interest rate decision, Australia trade balance and Ivey Purchasing Managers Index from Canada. Also a lot of industrial productions readings from Europe will be released tomorrow.
AUDUSD bounced of the local resistance level at 0.6457. Should downbeat moods prevail, resistance at 0.6208 may come into play. Source: xStation5
