Global markets continue to bear the brunt of COVID19 pandemic that has threatened to ground things to a halt. The week commencing 13 April and ending on Friday 17 was a shortened one as major markets closed on Monday for the Easter holidays. However, major markets remained optimistic about the resumption of normal operations as there are talks about easing of social distancing measures.
During the week investors seemed to weigh record downturns in economic data against the optimism that the progress in containing the spread of COVID19 pandemic might in the near term result in the partial opening of global economies.
OIL – Crude oil prices remained battered in the week despite the landmark OPEC+ deal that saw production cuts of about 10m BPD. WTI crude entered the sub $20 region per barrel in the week. Actually, by Sunday 19 April crude had plummeted to a 21-year low as uncertainty mounts around storage of excess supply to hit $15 per barrel.
Tuesday – Some major banks reporting first-quarter profits with JP-Morgan Chase and Wells Fargo reporting profit declines of 70% and 89%, respectively.
Wednesday – as expected the Bank of Canada maintained the key interest rate at 0.25 and announced more stimulus package that was positive for the USDCAD. The bank announced that it is keeping its key interest rate target on hold at 0.25 per cent asserting that the low rate will help to combat the economic impacts of COVID-19.
Thursday – US unemployment claims continued to soar to hit 22 million in four weeks as a result of coronavirus. The US Department of Labor announced initial jobless claims for the week ending 11 April fell by 1.37 million to 5.25 million. Initial jobless claims hit an all-time high at 6.8 million in the week ended March 27 even as Morgan Stanley estimates that the figures will gradually begin to fall in the coming weeks as firms factor in the impact on business operations.
Friday – Chinese GDP figures for Q1:2020 were released recording their first decline in the 28 years of reporting quarterly GDP figures. The Chinese economy contracted -6.8% in the three months to March. Analysts expected a dip in the GDP figures as Coronavirus had halted production facilities in China starting in January. Probably, this signals the performance of the global economy in Q1:2020 as more economic figures are expected this week.
