Market movers today
Focus this week continues to be on the virus developments, especially in the US, where the number of infections and deaths is rising significantly. Meanwhile, the growth rate in new infections and deaths is coming down in Europe, signalling that the lockdown measures implemented are beginning to have the desired effect and contamination has peaked. The epicentre has moved to Spain from Italy.
Today’s data print that may attract some attention is the Sentix investor confidence, but otherwise focus is on the Eurogroup meeting tomorrow where corona bonds and other policy options are expected to be discussed, see The case for ‘corona bonds’ and other policy options , 3 April. Later this week, Fed and ECB minutes are due for release, but the recent measures and incoming data will make them less relevant compared to usual. US initial jobless claims will be closely monitored on Thursday.
Focus this week will also be on the ongoing oil war. OPEC+ is tentatively scheduled to meet on Thursday, but we will also look for headlines before then.
Selected market news
Risk sentiment was sour on Friday amid a much worse-than-expected non-farm payrolls jobs report of -701k. It is still outdated as it does not reflect the big increase after the reference week. The April report is going to be a sad one. In the Asian session risk sentiment was mostly positive, as cases in virus hotspots in Asia appear to be levelling off. The Japanese government is said to lay out a two-step plan as well as declare national emergency as the virus takes its toll. No overall package size was disclosed, but unemployment schemes and support for companies were mentioned. A JPY10,000 handout to households with kids affected by the virus was also mentioned. Lower-income families are said to be able to get up to JPY300,000.
The global epicentre of the coronavirus has moved to the US, which is by far the most affected country. US President Trump said that if under 100,000 people died on the back of the virus, it would be considered a good job.
The oil price rallied sharply on Friday on unconfirmed media reports that OPEC+ was contemplating an emergency meeting on Monday to discuss a large output cut. Over the weekend, the meeting has been pushed back and is now tentatively scheduled for Thursday. Major oil producers are trying to work out a deal to cut global oil output 10%. The sticking point for Saudi Arabia and Russia seems to be whether producers outside OPEC+ will join the deal, most notably the US. Saudi Arabia is holding back its plan for deliveries and prices in May until Thursday as it looks for a resolve of the current supply-demand imbalance. Meanwhile, the US oil rig count plunged on Friday – a signal that US production will take a hit from the large drop in the oil price. After an initial drop of more than 10%, Brent oil is now only 1% lower than Friday’s close.
UK PM Johnson was hospitalised for tests as he continues to have a high fever, 10 days on.
