En medio de la incertidumbre en torno a la próxima reunión de los productores de la OPEP y los que no pertenecen a la OPEP, principalmente conocidos como OPEP +, Bloomberg salió con la noticia que sugiere la extensión de los recortes de producción actuales. La noticia también espera que la discusión tenga lugar durante el fin de semana.

Citas clave

Después de casi una semana de disputas, los líderes de la OPEP +, Rusia y Arabia Saudita, cerraron un acuerdo tentativo con el miembro de Irak, según un delegado. La pareja estaba presionando a Irak para que dejara de eludir su parte de los recortes y cumplir con lo que el cartel acuerda.

El acuerdo, aunque aún no se ha ratificado, significa que la OPEP + extenderá sus límites de producción récord por otro mes.

Implicaciones del mercado

WTI se beneficia de las noticias, ya que aumentó hasta $37.58 desde $37.48 después de la publicación. Sin embargo, la cercanía al cierre del mercado estadounidense parece haber restringido la reacción del índice de referencia del petróleo a la actualización positiva del precio.

While revealing another failure of UK PM Boris Johnson-led Tory party’s handling of the coronavirus (COVID-19), The Guardian came out with the news suggesting the test-and-trace system by the National Health Services (NHS) would be imperfect at launch.

Key quotes

Tony Prestedge, the chief operating officer of the NHS scheme, admitted in a webinar to staff that the program would be ‘imperfect’ at launch, adding that he hoped it would be operational at a world-class level within three to four months.

It comes as a leaked email from the chief executive of Serco – one of the main companies contracted to deliver the service – revealed how he doubted the scheme would evolve smoothly but said he wanted it to ‘cement the position of the private sector’ in the NHS supply chain. 

Justin Madders, a shadow health ministers, said the idea that the system may be months away from being fully operational was deeply concerning.

FX implications

Following the news, GBP/USD extends its pullback moves from 1.2605 to 1.2593 amid the early Friday morning in Asia.

Amid uncertainty surrounding the next meeting of the OPEC and non-OPEC producers, mostly known as OPEC+, Bloomberg came out with the news suggesting the extension of the current production cuts. The news also expects the discussion to take place during the weekend.

Key quotes

After almost a week of wrangling, OPEC+ leaders Russia and Saudi Arabia clinched a tentative deal with holdout member Iraq, according to a delegate. The pair were pushing Iraq to stop shirking its share of cuts and to comply with what the cartel agrees.

The agreement — though still to be ratified — means OPEC+ will extend its record production curbs for another month. 

Market implications

WTI benefits from the news as it ticked up to $37.58 from $37.48 after the release. Though, nearness to the US market’s close seems to have restricted the oil benchmark’s reaction to the price-positive update.

US Secretary of State Pompeo has said that the Nasdaq move on listing rules particularly important given pattern of ‘fraudulent’ accounting practices by China-based firms according to reports by Reuters.

Key comments

Pompeo says US investors should not be subjected to hidden and undue risk from companies that do not abide by same rules as US firms.

Pompeo says Nasdaq action should serve as a model for other exchanges in united states and around the world.

Market implications

There has not been an immediate reaction to the headlines although they will go to serve the trade war narrative which is starting to become more prominent in markets again towards the end of the week. 

  • USD/CHF bearish trend gathers pace, energised on hard fundamentals
  • Dow Jones unofficially closes down 6.45 points, or 0.02%, at 26,263.44.
  • NASDAQ unofficially closes down 74.82 points, or 0.77%, at 9,608.10.
  • S&P 500 unofficially closes down 12.65 points, or 0.41% , at 3,110.22.

US benchmarks ended mixed on the last day before the crucial jobs report from the US. The outlook for the economy is fickle and investors wearing their rose-tinted glasses assessing a promising outlook for the US economy were unable to ignore some of the cracks in the recent data and signs of a swell of COVID-19 on the horizon. 

Consequently, the Dow was off its highs and ended up by around just 12 points, or less than 0.1%, near 26,282. The S&P 500 lost 11 points, or 0.3%, to close near 3,112 while the Nasdaq shed around 67 points, or 0.7%, to finish at 9,615. 

Rising risk appetite outside of the US helped to buoy stocks on Wall Street, to begin with. However, a late-session sell-off took prices to test below the prior session’s lows as the jobs data is expected to paint a telling picture of the economy in the form of Nonfarm Payrolls.

At the same time, as many as 20 states where new coronavirus cases are increasing over the past five days weighed on investor minds.

Meanwhile, the ECB delivered another bazooka which had helped to lift spirits in some areas of the financial markets, but not so much in stocks. We had already seen strong gains prior to today’s announcement on the expectations of the package. 

The global equity rally has been spectacular

Analysts at ANZ Bank noted that the S&P 500, for example, is up 38% since its March lows, to sit only 8.2% below its February peak.

Causes of the global rebound are several: a sense that central banks have investors’ backs, huge fiscal stimulus, decidedly unappealing bond yields, and falling daily COVID-19 case numbers in most developed countries. But what’s lacking, on the whole, are decent earnings outlooks as the globe navigates an enormously negative income shock, with forward price to earnings ratios becoming eye-watering. Time will tell.

Investors hit the brakes ahead of NFP

Meanwhile, the longevity of this coronavirus crisis is the key factor here.

While the US stock market’s recovery on prospects of an uninterrupted COVID-19 re-opening has been impressive, can it withstand a protracted economic downturn on the back of a market that can’t replenish jobs for millions of people, in not just the US, but all over the world?

For instance, ahead of tomorrow’s NFP, when we look at recent data and taking the jobless claims that fell this week, they remain extremely elevated considering the US economy is clearly on the re-opening path. In the context of an economy that is re-opening this data is extremely high, especially when viewed against previous recessions.

Also, Los Angeles Times analysis shows that the number of weekly cases in California continues to rise, exceeding 17,000 last week for the first time in the pandemic. California is one of about 20 states where new cases are increasing over the past five days, according to Johns Hopkins University.

The recovery in the jobs sector is unlikely to be swift when factoring in the fear of going back to work in the population all the while there is no cure nor vaccine and cases continue to rise – something to keep in mind heading into Friday’s jobs market. 

 

 

  • El índice del dólar estadounidense (DXY) se mantiene bajo una fuerte presión de venta cerca de los niveles vistos por última vez a mediados de marzo de 2020.
  • El nivel a batir para los bajistas es el soporte 96.60.

 
Gráfico de 4 horas


 
DXY sigue cayendo mientras rompe por debajo del nivel de 97.00 y alcanza el nivel de 96.60. A medida que los bajistas se mantienen a cargo, el dólar puede ver más pérdidas, especialmente en una ruptura por debajo del soporte de 96.60 en el camino hacia los niveles 95.90 y 95.43. La resistencia se puede ver cerca de los niveles de precios 97.00, 97.50 y 97.80 inicialmente.
   
   
Niveles clave adicionales

                                   

  • El dólar estadounidense se ha depreciado 2% esta semana para alcanzar mínimos de tres meses en 1.3468
  • El par está tratando de encontrar soporte en la SMA de 200 días, en el área de 1.3460.

El dólar estadounidense se ha depreciado frente a su contraparte canadiense por cuarto día consecutivo el jueves, alcanzando nuevos mínimos de tres meses en 1.3468. Después de haber perdido alrededor del 2% en lo que va de la semana, el par ahora está probando el soporte en la SMA de 200 días, alrededor de 1.3460, con RSI en niveles de sobreventa en los gráficos diarios.

Los intentos para recuperar el terreno perdido se han mantenido limitados por debajo de 1.3540 con el dólar eclipsado por la fortaleza del EUR/USD después de la decisión del Banco Central Europeo de aumentar su paquete de recuperación de coronavirus más allá de las expectativas.

En el otro extremo, la demanda de CAD también se ha limitado con los precios del petróleo estancados y las cifras de la balanza comercial canadiense que muestran lecturas pesimistas. El déficit comercial se amplió a $3.3 mil millones en abril, ya que las exportaciones cayeron casi un 30% a su nivel más bajo en 10 años.

En el lado negativo, la mencionada SMA de 200 en 1.3463 está protegiendo el camino hacia el nivel de 1.3420, lo que cerraría la brecha del 3 de marzo al 6 de marzo antes del mínimo del 3 de marzo en 1.3320. Por el lado positivo, la resistencia inmediata se encuentra en 1.3540 máximo intradiario, y por encima de aquí, 1.3575 (máximo del 3 de junio) y máximos de finales de 2018 en 1.3660.

Gráfico diario

Niveles técnicos

                                    

  • AUD/USD is approaching the 2020 highs. 
  • The level to beat for buyers is the 0.6990 resistance. 
 

AUD/USD four-hour chart

 
AUD/USD keeps rising and nearing 2020 highs as the USD selloff stays intact. The aussie is trading just below the 0.6990 resistance while above the main SMAs as the overall bullish bias prevails. However, the spot will need to overcome the 0.6990 level for a possible run towards the 0.7183 resistance levels. On the flip side of the coin, a turn lower could find initial support near the 0.6834 and 0.6749 levels.
 
 

Additional key levels

 

What you need to know on Friday, May 5th:

The ECB expanded its PEPP by €600 billion and extended its stimulus scheme until June 2021 or as long as needed. Growth and inflation forecasts for this year and the next ones have been downgraded. President Lagarde said she expects the economy to bounce back in Q3.  The announcement helped EUR/USD extend its gains beyond 1.1300.

The German Merkel’s coalition reached a deal on a €130 billion stimulus package, which consists of tax cuts and infrastructure spending.

The greenback remained under pressure despite the market mood turned sour. Equities closed in the red in Europe, while US indexes closed mixed around their opening levels. US employment-related data came in below expected, somehow anticipating a dismal US Nonfarm Payroll report this Friday.

GBP/USD reached fresh highs above 1.2600, despite bad news in the Brexit front. After three days of talks, both parts recognized that they remain far apart on core topics, with no agreement on their future trade relationship. German’s ambassador in Brussels, Michael Clauss, said that EU leaders would intervene in the negotiations in the autumn in an attempt to clinch a deal by mid-October.

US Treasury yields advanced, with the yield on the benchmark 10-year note hitting 0.82%, underpinning USD/JPY which settled above 109.00.

Crude oil prices posted a modest intraday advance, as investors remained cautious amid uncertainty surrounding OPEC+  agreement on additional output cuts. Gold prices recovered after Thursday’s sharp slide. Spot settled around 1,715.

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Bank of Canada Deputy governor Toni Gravelle says even if the bank has a large balance sheet, it does not preclude it from heading off future challenges. Earlier, when asked about business debt, Bank of Canada (BoC) Deputy Governor Toni Gravelle said he hopes higher debt level will help businesses recover quickly and be able to repay debt incurred.

Market reaction

These comments had little to no impact on the CAD’s performance. The loonie has been gathering pace of late but has stalled vs the dollar today following a 2.7% drop from the prior bearish impulse.