• Jump in Covid-19 infections in New York state
• US government is preparing further stimulus package
US indices are trading lower after a volatile start of today’s session. Initially market sentiment improved as the Chicago PMI and CB Consumer Confidence dropped less than expected in March. Investors also welcomed the news that the US government is preparing a fourth stimulus package to help the economy to recover and to stop the spread of the pandemic as the number of infections in the US increased to 175,000. Also Fed announced a temporary lending facility agreement for central banks, aiming to provide an alternative source of US dollars. However stocks fell as the number of new infections in New York state jumped 14% to 75.795. During today’s session Dow Jones dropped 0.55 % ; S&P 500 went down 0.66% and the Nasdaq is trading 0.18 % lower.
The US dollar traded higher today against most of the major currencies besides British pound which surged above $1.24, after falling in the morning due to concerns about the spread of the coronavirus. Fitch lowered UK’s sovereign debt as the amount of debt would increase amid efforts to combat the rapid spread of the pandemic while uncertainty surrounding trade negotiations with the European Union also poses risks.
Oil prices managed to rebound slightly, after US President Donald Trump and Russian President Vladimir Putin agreed to have their top energy officials discuss the current situation on oil markets. However oil prices are still trading under pressure as travel restrictions and city lockdowns around the world could last months and negatively affecting oil demand. US crude went up 0.14% while Brent fell 0.15%.
Market volatility is expected to continue as investors worry about how the coronavirus outbreak will stop and how bad the consequences will be while trying to assess if the stimulus measures announced will be enough to offset the economic impact of the pandemic.
ADP Non-Farm Employment Change and ISM Manufacturing PMI are the main data scheduled to be announced on Wednesday. Oil traders should pay attention to US Crude Oil Inventories numbers. Apart from that, German, Switzerland and Spain will release their Manufacturing PMI figures. Of course Markets’ focus still will be on coronavirus spread and response to it.
