Here is what you need to know on Wednesday, April 1:
Investors are not tricked on April Fool’s Day and are in a gloomy mood. Asian stocks and S&P futures are down at the beginning of the second quarter after the first quarter was the worst since 2008.
The US dollar is gaining some ground across the board after a volatile close to the quarter. President Donald Trump has issued a grim warning, talking a painful two weeks, while his advisors discussed various estimates of mortalities. Nearly 190,000 people have been infected in the US, with the death toll topping 4,000. The White House is considering cutting tariffs as another easing step.
EUR/USD is under pressure as the death tolls in Spain and France continue rising, while infections in Italy seem to level off. Final manufacturing Purchasing Managers’ Indexes for March are projected to confirm only moderate contraction – yet this is due to a quirk in the methodology that counts delays as a positive factor. Eurozone countries remain at odds over corona-bonds. France, Italy, and Spain want a debt sharing scheme, while Germany and the Netherlands oppose it.
GBP/USD is trading below 1.24 after a volatile Tuesday, as the UK continues suffering rapid contagion. Final UK Manufacturing PMI is forecast to show a minor downgrade.
US data stand out later in the day. ADP’s private-sector jobs report is set to show a loss of around 150,000 jobs, in a precursor to the official Non-Farm Payrolls report.
See ADP Non-Farm Payrolls Preview: The job onslaught begins
Later on, economists expect a considerable fall in March. The Employment Component serves as another hint towards the NFP.
See ISM Manufacturing PMI Preview: Markets return first, factories second?
In China, the Caixin Manufacturing PMI came out at 50.1, indicating minimal growth and in line with the government’s figures. The statistics failed to cheer markets.
Oil prices are hovering around the lows, with WTI trading at the $20 handle. Saudi Arabia and Russia are considering a meeting to discuss petrol prices after launching a price war earlier this year. Trump spoke with Russian President Vladimir Putin earlier this week.
Cryptocurrencies have been on the back foot, with Bitcoin trading around $6,300.
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