Wednesday turned out to be very ambiguous for all market participants. On the one hand, everyone is already used to living during quarantine, movement restrictions, closed production, although the global problems are still ahead, when the current quarantine will directly affect the income and economic performance of all countries in the world. Many developing countries are approaching a default line, which could start a chain of defaults in small developing countries.
The risk and appetite of investors died out on Wednesday. The S&P500 index is losing 2% and trades at 2780. DAX loses almost 4% and trades at 10280. Although now it’s time for corporate reporting in the U.S., when markets tend to grow on reports, we will probably see the opposite picture, as the data is not at all comforting. In the near future, investors will be making decisions after evaluating the real situation of companies. Growth is unlikely unless the government reports some kind of drastic measures to combat the pandemic.
EUR/USD pair is moving around the level of 1.09 and is not attempting to try any new levels. In Europe, there is a disagreement, the leaders of the countries differ in their vision of the current situation and re-insure themselves in statements. Disagreements on the latest Eurogroup agreements are becoming more and more common. From the technical point of view, the euro is more inclined to the level of 1.0800, which opens at 1.0650.
Looks like there’s a big failure in the oil market. Negotiations of OPEC+ turned out to be so vague and not specific in terms of volumes and deadlines that investors simply ran out of patience. All the more so because Donald Trump decided not to reduce oil production in the US unless the markets want it. The driver for oil movement was the data on oil reserves. The final statistics of the US Department of Energy finally broke the markets with the actual value of 19.24 million barrels, when the forecast was for a decline of 11.939 million barrels. WTI oil went down and on Wednesday traded at a low of $20 per barrel. This is bad news for the oil and the decline is likely to continue.
Gold is stable and at its peak for the last few years. Many investors are looking at the USA and at the economic recovery. The U.S. President’s announcement of a halt to support for the WHO at such a serious moment for the world is very mixed, exposing America to the world. So far, there are no serious signals of economic recovery in the US. Therefore, in the near future gold will try to rise to the level of $1800 per ounce.
What’s waiting for us today?
03.30 Changes in Australia’s employment rate
10.00 IFO Business Climate Index in Germany
14.30 Number of initial applications for unemployment in the United States
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