Global stocks rose today as the market reacted to the surprise manufacturing PMI data from China. Data from China Logistics Information Services showed that manufacturing and non-manufacturing activity rose in March. The two rose to 52.0 and 52.3 respectively, which was the biggest bounce ever. Activities rose as most of the country returned to work after the Lunar new year and from the Coronavirus lockdown. As the second-biggest economy in the world, investors pay close attention to the happenings in the country. In Europe, the Stoxx, DAX, and FTSE rose by 0.25%, 0.65%, and 0.70% respectively. In the US, futures pointed to slight gains by the Dow, S&P, and Nasdaq.
The price of crude oil rose today in response to the improving manufacturing activity in China. The price also rose after Trump said that he would talk to Putin in a bid to stabilize oil prices. Trump, who has always favoured low oil prices, has been surprised by the prospect of many American oil companies facing bankruptcy. This would threaten the US energy independence, which he has always touted. The prices also rose after US producers reduced their output. According to Goldman Sachs, the recent well closures has reduced output by about 1 million barrels per day.
The euro declined today as the market reacted to news that the ongoing shutdown could remain for months. The currency also declined after Eurostat released important inflation data. The numbers showed that the region’s CPI declined to a six-year low of 0.7%. This was lower than the consensus estimates of 0.8% and the previous rate of 1.2%. The rate was led by an increase of food and beverages. The core CPI declined from the previous 1.2% to a low of 1.0%. The main contributor to low inflation was the low energy prices.
The EUR/USD pair declined to an intraday low of 1.0953, which was the lowest level since Thursday last week. The pair dropped below the important support of 1.0985, which is shown in yellow below. The price is below the 14-day and 28-day exponential moving average on the hourly chart. Similarly, the RSI has started to decline, and is now at the oversold level of 28. The pair may continue declining during the American session.
The XBR/USD pair rose to an intraday high of 28.12, which is significantly higher than yesterday’s low of 25.51. The price is above the short and medium-term moving averages and close to the 50% Fibonacci Retracement level on the hourly chart. The RSI too has been rising, and is headed towards the overbought level of 70. The pair may continue rising as traders wait for more information on crude oil.
The AUD/USD pared back earlier gains as traders faded on the positive news from China. The pair is trading at 0.9060, which is at the intersection of the red and yellow support lines shown below. The 14-day and 28-day exponential moving averages have made a bearish crossover while the RSI and Stochastic oscillator have been falling. The pair may continue declining ahead of the China and Australia PMI data from Markit.
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