Macroeconomic/ geopolitical developments
- The data regarding the spread of the COVID-19 virus continues to see some encouraging improvement in some places, mostly in Europe, with a plateauing and even decline in the number of new cases and deaths.
- Furthermore, some European nations alongside some US States are starting to relax lockdown measures and open their economies or even looking at relaxing rules.
- However, there are also notable concerns with respect to lowering lockdown guidance too quickly, with fears of a second wave of the coronavirus cases and deaths.
- The global economic slowdown was once again underlined with a high US Jobless Claims number on Thursday, now with over 26 million Americans claiming for unemployment in the five weeks since early March when the US lockdown started.
- In addition, global Flash Purchasing Managers Index (PMI) data for April was released by Markit on Thursday, which were below expectations across the major global economies.
- On another disappointing note, the hopes from the Chicago hospital successfully using the antiviral medicine remdesivir to treat severe COVID-19 patients have been dashed by further clinical trials that have NOT confirmed these positive results.
Global financial market developments
- The key development in markets last week was the plunge in the US Light Crude Oil futures price for the front month contract through zero, to trade at negative $40.
- Although partially due to futures markets technicalities, this plunge lower has highlighted the underlying fragility of the oil market, given the plummet in global demand for oil in lockdown and with storage facilities hitting capacity limits.
- This oil price plunge unnerved global financial markets and halted the previous positive tone for riskier assets seen in the first half of April.
- In addition, with the number of cases plateauing and a possible move to ease lockdowns, global financial markets have struck a more cautious tone in the past week, with global equity averages in a consolidation, holding phase.
- The US Dollar is modestly stronger in the past week, as the more positive tone previously seen across global stock averages has eased somewhat, arguably shifting the outlook to slightly more of a “risk off” theme.
- Despite the US Dollar rally, Gold has rebounded, eyeing the recently set multi-year high.
- Base metals have pushed higher, with Copper prodding to a new multi-week high.
Key this week
- A busy week on the Central Bank side; Bank of Japan (BoJ) Tuesday, US Federal Open Market Committee (FOMC) on Wednesday and European Central Bank (ECB) on Thursday.
- Monitoring for a further slowdown in the number of cases/ deaths from the coronavirus in Europe and the US.
- Possible information on easings of lockdown directives in Europe and in some US States.
- Earnings season continues this coming week with some dividend and tech giants in the spotlight. Highlights include; Google, Pfizer, Merck & Co, BP, Facebook, Tesla, Boeing, GE, Royal Dutch Shell, Apple, Amazon, Exxon Mobil and Chevron.
- Many European markets are closed Friday 1st May for national holidays.
Date | Key Macroeconomic Events |
27/04/20 | Nothing of note |
28/04/20 | BoJ Meeting, interest rate decision, press conference; US Consumer Confidence |
29/04/20 | German CPI; US GDP; FOMC Meeting, interest rate decision, press conference |
30/04/20 | Chinese PMI; German Unemployment; Euro Zone CPI and Unemployment; ECB Meeting, interest rate decision, press conference |
01/05/20 | US ISM Manufacturing PMI; many European Markets closed for national holidays |