Relative Calmness Returned to the Financial Markets (Weekly Review)

The challenging world situation caused by the spread of coronavirus remains the main factor in the financial markets. Many countries are forced to resort to tough measures, in particular the introduction of quarantine, and as a result people lose their jobs, and companies lose their profit, but this did not stop stock indices from avoiding a new wave of sales last week, and the bulls did not abandon attempts to break higher. Along with the above, the CHF and the JPY are under pressure, and the USD paired with these currencies was able to win back some of the losses.

Oil futures remained under the power of bears almost the entire week, but they failed to update the lows. Tweets by U.S. President Donald Trump suggesting an agreement between the Russian Federation and Saudi Arabia regarding a deal to reduce the production of black gold helped restore quotes, which, however, was suspended by postponing the OPEC+ meeting to March 9. In anticipation of this event, market participants may refrain from both buying and selling oil, so one can suggest consolidation in the ranges in the days to come.

US labor market data released on Friday turned out to be weak. Since no one expected strong data due to the spread of the coronavirus, the market reaction was rather sluggish, and the volatility in the foreign exchange market decreased markedly. The EUR could not benefit from weak US statistics, and may continue to decline to the lows of this year. Risks of decline will prevail until positive news comes from Italy and Spain; one should not expect steady growth from the GBP as well.

Schedule for this week:

Monday, April 6
14:30 GMT - Canada. Bank of Canada Business Outlook Survey.

Tuesday, April 7
01:30 GMT – Australia. Trade Balance;
01:30 GMT - Australia. Import/Export;
04:30 GMT - Australia. Reserve Bank of Australia (RBA) Interest Rate Decision;
04:30 GMT - Australia. Reserve Bank of Australia (RBA) Rate Statement;
06:00 GMT - Germany. Industrial Production;
14:00 GMT - Canada. Ivey Purchasing Managers Index (PMI).

Wednesday, April 8
05:45 GMT - Switzerland. Unemployment Rate;
12:15 GMT - Canada. Housing Starts;
18:00 GMT - USA. Federal Open Market Committee (FOMC) Meeting Minutes.

Thursday, April 9
00:30 GMT - Japan. Bank of Japan Governor Kuroda Speaks;
06:00 GMT – United Kingdom. Industrial Production;
06:00 GMT - United Kingdom. Manufacturing Production;
07:00 GMT - Germany. Trade Balance;
12:30 GMT - USA. Initial Jobless Claims;
12:30 GMT - Canada. Unemployment Rate;
12:30 GMT – Canada. Employment Change;
19:00 GMT - USA. OPEC Meeting.

Friday, April 10
01:30 GMT - PRC. Consumer Price Index (CPI);
12:30 GMT - USA. Consumer Price Index (CPI);
12:30 GMT - USA. Core Consumer Price Index (CPI);
18:00 GMT - USA. Federal Budget Balance.

Author: Anthony Porter, IAFT Analyst