Wednesday was a day of positive and negative headlines regarding the COVID-19 as the World Health Organisation said the number of newly reported cases globally hit a daily record. This comes despite governments around the world attempting to ease lockdown restrictions. The positive side showed that in Europe and the UK infection rates were starting to slowdown drastically.
The choppy, volatile week continued on Wednesday as we yet again saw global stock markets reverse the previous days move. The Dow Jones and S&P500 both ended higher while stocks in Asia slipped slightly lower. The indecision looks set to continue into Thursday's session with both US and European futures markets currently pointing to weaker opens.
Oil prices have edged higher yet again after Wednesday's oil inventory data fell yet again easing the oversupply issue and showing more space for storage as demand picks up due to the easing of lockdown. Rolling cash WTI oil prices are now sitting at a stable $34.30 per barrel. While the new July futures contract trades at a similar level.
This afternoon we will get the key initial jobless claims reading as markets are set for another dire reading. Expectations are for another 2.4 million to have claimed job seekers allowance over the last week. At yesterday's FOMC meeting minutes we saw that the Fed had been concerned about the unemployment picture. Jerome Powell has previously stated that unemployment in the US could hit 25%.
The minutes from April's rate setting meeting also showed there is deep concern not just about the current state of the economy, but also what lies ahead. Investors continue to ignore the economic warnings, buying into stock markets. Even this week while we have seen a mixture of volatile movements the upside moves have been stronger than the downside. The Fed also warned that the amount of bankruptcies for small and medium sized business could well put enormous strain on the banking sector.
This morning we will see some key data out of Europe and the UK as the flash PMI readings are expected to show all sectors of the economy are still struggling. However we do expect a stark improvement from Aprils data as Composite, manufacturing and services PMI's are expected to post higher readings.
Any number above 50 shows an increase in output in these sectors, and while we will not see an improvement that shows the sectors increasing, we could well see them improving.
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