Investors expect the economy to be positive. Will the trend be able to reverse?

By 20/04/2020News
Morning Stock News

Gold   1693,50
(-1,00%)

EURUSD   1,0869
( -0,07%)

DJIA  24115
(-0,65%)

OIL.WTI  25,095
(-5,55%)

DAX   10609
(+ 2,87%)

Last week, the most expected statistics was on the Chinese economy. China was the first to be infected with coronavirus, the first to block the disease and the first to leave quarantine. Of course, most investors are looking at the second largest economy in the world and predict how difficult it will be for other countries to recover from the crisis.


GOLD

Gold

The figures for China came out better than predictions, but still the government has something to work on. Investors will now see how quickly China can rebuild its production capacity. Microrallies in stock markets that started on Thursday continued on Friday. The world markets were actively growing on expectations of economic recovery and increasing chances to find a vaccine against coronavirus. On Friday, the DAX index rose 3% to 10615, the S&P500 index rose 2.6% to 2874.66.


Euro

At the end of the week, the euro continued to trade in a very narrow range. Now investors are waiting for how difficult it will be for Europe to overcome the coronavirus pandemic. According to preliminary data, the number of cases is decreasing in some countries. Countries are starting to partially lift quarantine measures and start production. So far, there are no strong signals on the growth of EUR/USD pair and it is likely that the price will remain further in a narrow range. The quarantine effect will appear only in one or two months, so everything is ahead.


Oil

The oil market is still stagnating. Country agreements to reduce oil production practically do not support the market, and countries’ inventories are beginning to be filled. The main task now is to prevent further price reductions so as not to lead the energy market to complete decline. Over the last week, the price of WTI oil fell to record lows and traded at $18 per barrel.


Gold

It was quite logical to assume a correction in gold by the end of the week. The metal has been actively growing for several weeks in a row, so investors fixed part of the profit, given that now the price is on the upper limits, near the historic high. In the long term, bullish sentiment on gold is preserved. We expect the output of gold above $1700 per ounce, where we will watch the further development of the situation.


What’s waiting for us today?

03.30 NBK base credit rate
08.00 German producer price index
11.00 Trade balance in the European Union


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