Dow Jones, US Dollar, Crude Oil, Earnings, Euro, EU Summit: Week Ahead
The Dow Jones and S&P 500 rose last week despite the US accumulating a grand total of 22 million jobless claims over the course of four weeks. This is the equivalent of wiping out the progress in employment gains since the aftermath of the 2008 financial crisis. While the haven-linked US Dollar saw some weakness, its downside progress has notably slowed.
Sentiment-linked crude was unable to capitalize on the rise in stocks as OPEC estimated oil demand dropping to a 30-year low. Meanwhile the growth-linked Australian Dollar cautiously rose despite China’s economy shrinking 6 percent y/y in the first quarter which was a historical downturn. Markets were able to look forward to slowing virus case growth globally.
With President Donald Trump presenting guidelines on reopening the economy and a couple of states taking measures to slowly ease travel restrictions, the possibility of a resurface in infections remains a risk. This is as first-quarter earnings season continues with tech, manufacturing, transport and health care companies ahead. Dismal reports from banking institutions offer caution.
Sentiment may however remain bolstered amid aggressive easing efforts from monetary and fiscal authorities. But as conditions improve, expect that these measures could be gradually unwound. The Euro is eyeing a virtual summit by EU leaders to discuss the budget as well as regional consumer confidence data. USD/CAD has Canadian retail sales to watch. What else is ahead?
The Mexican Peso sees renewed volatility due to risk-off sentiment and debt downgrades due to the economic impact of Covid-19.
The price of gold extends the pull back from the yearly high ($1748) as President Donald Trump unveils fresh guidelines in opening up the US economy.
The Australian Dollar has risen sharply and perhaps counterintuitively in April as markets pin their hopes on turbo-charged stimulus to fight the contagion’s economic effects.
Global financial markets are at a critical point. Will the next move be up as the coronavirus pandemic peaks or down on fears of a deep recession? With the latter all but certain, more Euro weakness is likely.
Earnings season began last week as some of the largest US banks reported a wide range of quarterly results and forecasts that cast concern over the rest of the season.
Signs of weakness beginning to show for global equities as the corrective rally looks to be exhausted.
USD/JPY gyrations have calmed , but the calm is bound to give-way soon to another directional move; there are levels to watch to help clue traders in.
Euro is off by more than 0.5% this week with our focus still on a breakout of the April range for guidance. Here are the levels that matter on the EUR/USD weekly chart.
This week, uptrend move led the price to a multi-week high. However, the price fell after. Will GBP/USD resume bullish price action next week or will bears comeback?
Gold prices have been stunted in recent days as risk assets rallied around hope that economies around the world would soon re-open. Don’t get your hopes up.
Crude oil prices are at an 18-year low despite efforts from OPEC+ to lower output as the virus threatens global demand. Lows from 1998 could be next but fading momentum persists.
The US dollar remains the haven currency of choice and buyers continue to control price action. Further upside is currently being blocked by a key Fibonacci level.
US DOLLAR WEEKLY PERFORMANCE AGAINST CURRENCIES AND GOLD
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