A more positive outlook continues

Intermediate

Macroeconomic/ geopolitical developments

  • In last week’s Macro Watch we highlighted the strong FOMO (Fear of Missing Out) rally across global stock averages, driven by encouraging data from Europe regarding the plateauing of the number of cases/ deaths from the coronavirus, from the relaxing of lockdown rules in some European nations and from the ongoing economic support being delivered by global Central Banks and government.
  • Although the COVID-19 virus continues to spread globally, with the epicentre in the OK and US, where the number of cases and deaths continues to increase, there continues to be some sporadic encouraging data from Europe, with some plateauing of the number of cases/ deaths.
covid data
  • In addition, more European nations are either relaxing or looking at relaxing lockdown rules, as are some US States.
  • Yes, the global economic slowdown was once more highlighted with another VERY high Jobless Claims number in the US on Thursday, with over 22 million Americans filing for unemployment in the four weeks since the lockdown began in early March.
  • BUT global Central Banks and governments continue to provide measures that are supportive of economies and these are starting to feed through to corporates and individuals.
central banks and government economic measures
  • On the positive front in the fight against the COVID-19 virus, a hospital in Chicago using the antiviral medicine remdesivir to treat severe COVID-19 patients saw rapid recoveries in respiratory symptoms and fever, with most patients discharged in less than a week.
remdesivir

Global financial market developments

  • The news of hope with the potential treatment for the COVID-19 virus helped global stock indices surge back higher Thursday/ Friday, with markets closing the week at or close to multi-week peaks.
  • This built on the prior week’s stock surge, with the S&P 500 positing its best one-week percentage return since 1974, up 12.1%.
  • In the Forex space, the US Dollar saw modest, broad strength last week, slightly decoupling from the “risk on” theme seen in the equity markets.
  • The US Dollar rebound saw a setback in Gold, after the surge to a new multi-year high.
  • Base metals have pushed higher alongside stocks, with the “risk on” theme seeing Copper at a new multi-week high. 
  • The oil price dropped again, despite the oil production cuts agreed over the Easter weekend.

Key this week

  • Watching for a possible slowdown in the number of cases/ deaths from the coronavirus in Europe and the US.
  • Also, awaiting further possible easings of lockdown directives in Europe and maybe in some US States.
  • On the Central Bank side we get the Peoples Bank of China (PBoC) interest rate decision on Monday and the Reserve Bank of Australian (RBA) Meeting Minutes Tuesday.
  • Standout data points through the week are the UK Employment report and German ZEW Survey on Tuesday, global Markit Purchasing Managers Index (PMI) data Thursday and US Durable Goods on Friday
  • Earnings season continues in the US this coming week, but as of yet the earnings data in the past week have had muted impact on the broader indices.
DateKey Macroeconomic Events
20/04/20PBoC interest rate decision
21/04/20RBA Meeting Minutes; UK Employment report; German ZEW Survey
22/04/20UK and Canadian inflation data (CPI)
23/04/20Global PMI
24/04/20US Durable Goods

Editor in chief

Steve Miley has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Market Chartist, the Editor-in...continued

Comment on this video

Your email address will not be published. Required fields are marked *


Latest Related News

UK Inflation Plunges in April As Covid-19 lockdown Hits Oil Prices

Headline inflation lowest in over three yearsFalling energy and fuel prices account for majority of slumpAnalysts expect UK inflation to approach zero over the summerJob losses to subdue wage inflation for the medium-termGBP drops further on lower-than-forecast CPI London, 20 May 2020 (LS NEWS) – The UK’s main rate of inflation plunged to its lowest level in nearly four years on cheaper fuel and energy… Continued

Shift towards “risk off” with growing US-China tensions and the easing of lockdowns

Macroeconomic/ geopolitical developments US-China tensions have increased this past week, with President Trump blaming China regarding the spread of the COVID-19 coronavirus and also with raised concerns regarding a possible resumption of trade conflicts.The past week has seen European nations and some US States continue to ease lockdown restrictions and to restart their economies.However, although the number of new cases and deaths from the COVID-19… Continued

Markets positive as governments look to ease lockdowns

Macroeconomic/ geopolitical developments European nations and some US States are looking at or starting to relax lockdown measures and begin to partially reopen their economies.This is as data regarding the number of new cases and deaths from the COVID-19 coronavirus virus have plateaued and even declined in some instances.However, some European nations have seen this data rising again, with concerns that easing lockdowns too quickly… Continued

Crude oil and German BUND Look

Hello traders, Crude oil extended its drop, down from 33.0 swing high, and fully unfolded a fifth wave of 3. Afterwards we have seen a new rally in minor five waves labelled as sub-wave A), up from the lows, which is a suggestion that a correction of a higher degree can be in play; wave 4. At the moment price is turning even higher from… Continued

USDCAD: what will CAD do with a broken oil market?

USDCAD is one of the most highly oil dependant pairs since both countries are major exporters of Crude oil, CAD being even more oil price dependant. Recent collapse of the oil market prompts to take a closer look at the short-term and long-term view. Technical View Looking at the weekly chart with applied Elliott Waves since 1994 we see that USDCAD is currently in wave… Continued

Forex Brokers in your location