Danske Research Team
Danske Bank A/S
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 It is still outdated as it does not reflect the big increase after the reference week.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.
This publication has been prepared by Danske Bank for information purposes only. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. Whilst reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and no liability is accepted for any loss arising from reliance on it. Danske Bank, its affiliates or staff, may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives), of any issuer mentioned herein. Danske Bank's research analysts are not permitted to invest in securities under coverage in their research sector.
This publication is not intended for private customers in the UK or any person in the US. Danske Bank A/S is regulated by the FSA for the conduct of designated investment business in the UK and is a member of the London Stock Exchange.
Copyright () Danske Bank A/S. All rights reserved. This publication is protected by copyright and may not be reproduced in whole or in part without permission.
Recommended Content
Editors’ Picks
EUR/USD holds above 1.0700 ahead of key US data
EUR/USD trades in a tight range above 1.0700 in the early European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
USD/JPY jumps above 156.00 on BoJ's steady policy
USD/JPY has come under intense buying pressure, surging past 156.00 after the Bank of Japan kept the key rate unchanged but tweaked its policy statement. The BoJ maintained its fiscal year 2024 and 2025 core inflation forecasts, disappointing the Japanese Yen buyers.
Gold price flatlines as traders look to US PCE Price Index for some meaningful impetus
Gold price lacks any firm intraday direction and is influenced by a combination of diverging forces. The weaker US GDP print and a rise in US inflation benefit the metal amid subdued USD demand. Hawkish Fed expectations cap the upside as traders await the release of the US PCE Price Index.
Sei Price Prediction: SEI is in the zone of interest after a 10% leap
Sei price has been in recovery mode for almost ten days now, following a fall of almost 65% beginning in mid-March. While the SEI bulls continue to show strength, the uptrend could prove premature as massive bearish sentiment hovers above the altcoin’s price.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.