CFD Markets News and Forecasts — 14-05-2020

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14.05.2020
22:30
New Zealand: Business NZ PMI, March 26.1
19:50
Schedule for tomorrow, Friday, May 15, 2020
Time Country Event Period Previous value Forecast
02:00 China Retail Sales y/y April -15.8% -7%
02:00 China Industrial Production y/y April -1.1% 1.5%
02:00 China Fixed Asset Investment April -16.1% -10%
06:00 Germany Producer Price Index (YoY) April -0.8% -1.8%
06:00 Germany Producer Price Index (MoM) April -0.8% -0.6%
06:00 Germany GDP (QoQ) Quarter I 0% -2.2%
06:00 Germany GDP (YoY) Quarter I 0.4% -2%
06:45 France CPI, y/y April 0.7% 0.4%
06:45 France CPI, m/m April 0.1% 0.1%
09:00 Eurozone Employment Change Quarter I 0.3% -0.4%
09:00 Eurozone Trade balance unadjusted March 23
09:00 Eurozone GDP (YoY) Quarter I 1% -3.3%
09:00 Eurozone GDP (QoQ) Quarter I 0.1% -3.8%
12:30 Canada Foreign Securities Purchases March 20.61
12:30 U.S. NY Fed Empire State manufacturing index May -78.2 -63.5
12:30 U.S. Retail Sales YoY April -5.8%
12:30 U.S. Retail sales excluding auto April -4.2% -8.6%
12:30 U.S. Retail sales April -8.4% -12%
13:15 U.S. Capacity Utilization April 72.7% 64%
13:15 U.S. Industrial Production (MoM) April -5.4% -11.5%
13:15 U.S. Industrial Production YoY April -5.5%
14:00 U.S. JOLTs Job Openings March 6.882
14:00 U.S. Business inventories March -0.4% -0.2%
14:00 U.S. Reuters/Michigan Consumer Sentiment Index May 71.8 68
17:00 U.S. Baker Hughes Oil Rig Count May 292
20:00 U.S. Total Net TIC Flows March -13.4
20:00 U.S. Net Long-term TIC Flows March 49.4
19:00
DJIA +0.65% 23,400.00 +152.03 Nasdaq -0.19% 8,846.14 -17.02 S&P +0.14% 2,823.85 +3.85
16:00
European stocks closed: FTSE 100 5,741.54 -162.51 -2.75% DAX 10,337.02 -205.64 -1.95% CAC 40 4,273.13 -71.82 -1.65%
15:10
BoC's senior deputy governor Wilkins: BoC currently is not planning to increase the size of its corporate bond purchases
  • As restrictions are gradually lifted, housing market should spring back to shape, it's hard to predict how quickly
  • Markets are functioning well right now and will continue to do so because we will ensure they do
15:05
BoC's governor Poloz: Bank will continue to do what is necessary to keep core financial markets working

  • I am confident that strong financial system will help Canada emerge in relatively good shap
  • Coronavirus pandemic remains a massive economic and financial challenge and it will leave higher levels of debt in its wake
  • Policy response will lay the foundation for recovery
  • BoC programs designed to expand with virus impact
  • Considerable uncertainty remains about the future course of pandemic and its economic consequences
  • Truly historic fiscal response helping mitigate shock
  • If they were to be second wave of economic fallout, we would need another scenario
  • Best case scenario remains within reach
  • We are headed for a different kind of normal where there would be a reasonable return to economic activity in third quarter


14:53
Canada’s manufacturing sales fell much more than forecast in March

Statistics Canada released its Monthly Survey of Manufacturing on Thursday, which showed that the Canadian manufacturing sales tumbled 9.2 percent m-o-m in March to CAD50.79 billion, following a revised 0.4 percent m-o-m advance in February (originally a 0.5 percent m-o-m gain), as many plants were shut down or faced sharply lower demand during the last two weeks of the month due to COVID-19. That was the biggest decline in manufacturing sales since December 2008.

Economists had forecast a 5.7 percent m-o-m decrease for March.

According to the survey, sales decreased in 17 of 21 industries, led by steep declines in the petroleum and coal product (-32.2 percent m-o-m) and transportation equipment (-26.5 percent m-o-m) industries. In contrast, sales rose noticeably in the paper (+8.4 percent m-o-m), food (+8.2 percent m-o-m), as well as beverage and tobacco (+6.7 percent m-o-m) industries.

Overall, sales of durable goods industries declined 4.9 percent m-o-m in March, while sales of non-durable goods industries plunged 13.1 percent m-o-m.

14:37
BoC's Financial Systems Review: BoC's facilities and purchase programs to address problems with market functioning and confidence are showing signs of succeeding

  • Access to liquidity has greatly improved in key financial markets that had been showing signs of significant stress
  • Many of the programs are now being used less than they were at inception
  • We will continue to assess the impacts of these measures and can adjust scale of these programs as market conditions change
  • Canada's key financial institutions are strong enough to deal with challenging conditions, including operational disruptions
  • Canada's six largest banks have strong capital and liquidity buffers, diversified assets and protection of a robust mortgage insurance system
  • Many paths to the recovery are possible; policy support will need to be flexible and adapt as the situation evolves
  • Demand effects are rooted in income losses and uncertainty about just how bad things could get
  • Fall in incomes and asset values and the rise in uncertainty about their future paths make lending to households and businesses riskier for banks and non-bank financial intermediaries
  • Strong policies have put a floor under economy and laid a strong foundation for its recovery
  • Government support for households and firms is directly mitigating income losses
  • Risk of credit downgrades is intensifying refinancing risks; energy sector has the most refinancing needs over the next six months ($6 billion) and faces the most potential downgrades
  • Following the COVID‑19 shock, riskier firms are finding it difficult to access these markets, partly due to shift in investor sentiment
  • Despite deferrals and added borrowing, some households are likely to fall behind on their loan payments
  • The longer the income shock lasts, the greater risk of rise in consumer insolvencies; flexible policy support can adapt as the situation evolves
  • What started as cash flow problem could develop into solvency issue for some businesses; this becomes more likely if loss in revenues extends over long period

13:59
U.S. Initial Jobless Claims: Slowing but still astronomically high – BMO

FXStreet reports that Jennifer Lee from the Bank of Montreal notes that the U.S. labor market is taking baby steps, at least there are fewer Americans applying for UI.

“Unemployment insurance claims declined for the sixth week in a row. That's it for the good news.”

“The number of first-time UI claims fell 195,000 (the smallest decline over that six-week period).”

“Although the number of claims is declining, the number of Americans who stay on UI remains sky-high. Continuing claims rose for the ninth straight week, up 456,000 to 22,833,000 in the week of May 2 (they're a week behind).”

13:44
ECB's Governing Council member Villeroy: We are and will remain flexible in implementing pandemic emergency purchase programme

  • We will not allow adverse market dynamics to lead to unjustified interest rate increases in some countries
  • Yields and spreads do matter, even if we don't target fixed levels
  • Eurosystem should be guided more by market dynamics and liquidity conditions than predetermined volumes of purchases

13:41
Germany's finance minister Sholz: Government wants to present stimulus package early June

  • We can cope with coronavirus crisis thanks to our solid fiscal policies of the past
  • We now must help companies to recover from coronavirus crisis
  • Fiscal stimulus measure will be timely, targeted, temporary and transformative
  • It's in our own interests that we also help European countries recover from coronavirus crisis
  • We don't need to think about changing the debt brake
  • Federal government must help municipalities stabilize local public finances

13:34
U.S. Stocks open: Dow -0.95%, Nasdaq -0.83%, S&P -0.91%
13:28
Before the bell: S&P futures -1.08%, NASDAQ futures -0.82%

U.S. stock-index futures fell on Thursday as investors assessed the U.S. weekly jobless claims data and U.S. president Trump's comments on China trade and listing of Chinese companies on U.S. exchanges


Global Stocks:

Index/commodity

Last

Today's Change, points

Today's Change, %

Nikkei

19,914.78

-352.27

-1.74%

Hang Seng

23,829.74

-350.56

-1.45%

Shanghai

2,870.34

-27.71

-0.96%

S&P/ASX

5,328.70

-93.20

-1.72%

FTSE

5,702.46

-201.59

-3.41%

CAC

4,212.74

-132.21

-3.04%

DAX

10,225.54

-317.12

-3.01%

Crude oil

$26.00


+2.81%

Gold

$1,727.20


+0.63%

13:02
Wall Street. Stocks before the bell

(company / ticker / price / change ($/%) / volume)


3M Co

MMM

135

-1.12(-0.82%)

16709

ALCOA INC.

AA

6.82

-0.16(-2.29%)

42249

ALTRIA GROUP INC.

MO

36.01

-0.35(-0.95%)

23499

Amazon.com Inc., NASDAQ

AMZN

2,358.00

-9.92(-0.42%)

33944

American Express Co

AXP

76.95

-1.08(-1.38%)

46857

AMERICAN INTERNATIONAL GROUP

AIG

24.12

-0.84(-3.37%)

24106

Apple Inc.

AAPL

302.9

-4.75(-1.54%)

447871

AT&T Inc

T

27.96

-0.13(-0.46%)

237767

Boeing Co

BA

118.94

-2.56(-2.11%)

302920

Caterpillar Inc

CAT

101.9

-2.58(-2.47%)

225152

Chevron Corp

CVX

86.81

-1.89(-2.13%)

106657

Cisco Systems Inc

CSCO

42.4

0.45(1.07%)

405395

Citigroup Inc., NYSE

C

39.7

-0.90(-2.22%)

178807

Deere & Company, NYSE

DE

123

-2.82(-2.24%)

780

E. I. du Pont de Nemours and Co

DD

42.6

-1.30(-2.96%)

2279

Exxon Mobil Corp

XOM

40.76

-1.17(-2.79%)

158045

Facebook, Inc.

FB

203.25

-1.85(-0.90%)

99933

FedEx Corporation, NYSE

FDX

108.19

-1.15(-1.05%)

4931

Ford Motor Co.

F

4.64

-0.08(-1.70%)

822469

Freeport-McMoRan Copper & Gold Inc., NYSE

FCX

8.19

-0.21(-2.50%)

31749

General Electric Co

GE

5.62

-0.17(-2.94%)

974425

General Motors Company, NYSE

GM

20.92

-0.54(-2.52%)

91522

Goldman Sachs

GS

167.38

-4.42(-2.57%)

12334

Google Inc.

GOOG

1,334.00

-15.33(-1.14%)

6837

Hewlett-Packard Co.

HPQ

13.98

-0.08(-0.57%)

5641

Home Depot Inc

HD

226.41

-3.69(-1.60%)

11564

HONEYWELL INTERNATIONAL INC.

HON

120.05

-2.02(-1.65%)

11577

Intel Corp

INTC

57.5

-0.24(-0.42%)

43960

International Business Machines Co...

IBM

114.17

-1.56(-1.35%)

22962

International Paper Company

IP

30.35

-0.50(-1.62%)

503

Johnson & Johnson

JNJ

146.18

-0.95(-0.65%)

80469

JPMorgan Chase and Co

JPM

82.1

-1.93(-2.30%)

208745

McDonald's Corp

MCD

170.75

-2.07(-1.20%)

8995

Merck & Co Inc

MRK

77.4

-0.49(-0.63%)

5228

Microsoft Corp

MSFT

177.99

-1.76(-0.98%)

204050

Nike

NKE

84.52

-1.50(-1.74%)

97922

Pfizer Inc

PFE

36.8

-0.25(-0.67%)

14531

Procter & Gamble Co

PG

113.25

-0.67(-0.59%)

162821

Starbucks Corporation, NASDAQ

SBUX

72.67

-0.95(-1.29%)

25306

Tesla Motors, Inc., NASDAQ

TSLA

773

-17.96(-2.27%)

210153

The Coca-Cola Co

KO

43.51

-0.43(-0.98%)

59643

Travelers Companies Inc

TRV

87.82

-2.04(-2.27%)

844

Twitter, Inc., NYSE

TWTR

27.7

-0.43(-1.53%)

67643

UnitedHealth Group Inc

UNH

275.55

-2.45(-0.88%)

2871

Verizon Communications Inc

VZ

54.55

-0.30(-0.55%)

35913

Visa

V

175.39

-1.70(-0.96%)

166847

Wal-Mart Stores Inc

WMT

124.33

0.62(0.50%)

13999

Walt Disney Co

DIS

101.33

-1.59(-1.54%)

53687

Yandex N.V., NASDAQ

YNDX

38

-0.71(-1.83%)

12421

12:57
U.S. import-price index drop less than anticipated in April

The Labor Department reported on Thursday the import-price index, measuring the cost of goods ranging from Canadian oil to Chinese electronics, was fell 2.6 percent m-o-m in April, following a 2.4 percent m-o-m decrease in February (originally a 2.3 percent m-o-m drop). That was the largest monthly drop since January 2015. Economists had expected prices to decline 3.1 percent m-o-m last month.

According to the report, the April drop was driven by lower fuel prices (-31.5 percent m-o-m, the largest one-month drop since the index was first published monthly in September 1992), while prices of nonfuel imports decreased only slightly (-0.5 percent m-o-m).

Over the 12-month period ended in April, import prices tumbled 6.8 percent, due to declines in both fuel (-56.6 percent, the largest 12-month drop since the index was first published in December 1984) and nonfuel (-1.0 percent) prices. The decrease was the largest over-the-year drop since the 12 months ended December 2015.

Meanwhile, the price index for U.S. exports declined 3.3 percent m-o-m in April, following a revised 1.7 percent m-o-m fall in the previous month (originally a 1.6 percent m-o-m drop). That was the largest one-month drop in export prices since the index was first published on a monthly basis in December 1988.

Falling prices for both agricultural (-3.1 percent m-o-m, the largest decline since July 2018) and nonagricultural (-3.3 percent m-o-m, the largest drop since the index was first published on a monthly basis in December 1988) exports contributed to the April fall.

Over the past 12 months, the price index for exports plunged 7.0 percent, reflecting drops in prices of both nonagricultural (-7.3 percent, the largest over-the-year drop since the index was first published in March 1985) and agricultural (-4.1 percent) exports. That was the largest 12-month decline since the 12 months ended September 2015.

12:40
Initiations before the market open

Netflix (NFLX) initiated with a Buy at Jefferies; target $520

12:36
U.S. weekly jobless claims hit 2.981 million

The data from the Labor Department revealed on Thursday the number of applications for unemployment reduced last week to the lowest level since the U.S. economy went into lockdown made to fight the COVID-19 pandemic, but still remained high.

According to the report, the initial claims for unemployment benefits totaled 2,981,000 for the week ended May 9. That brings the number of job losses over the past seven weeks to near 36.5 million.

Economists had expected 2,500,000 new claims last week.

Claims for the prior week were revised upwardly to 3,176,000 from the initial estimate of 3,169,000.

Meanwhile, the four-week moving average of claims fell to 3,616,500 from a revised 4,180,500 in the previous week. That was the third straight weekly decline.

12:30
U.S.: Continuing Jobless Claims, May 22833 (forecast 25100)
12:30
U.S.: Initial Jobless Claims, May 2981 (forecast 2500)
12:30
U.S.: Import Price Index, April -2.6% (forecast -3.1%)
12:30
Canada: Manufacturing Shipments (MoM), March -9.2% (forecast -5.7%)
12:25
GBP/USD: Double top confirmed – Credit Suisse

GBP/USD: Double top confirmed – Credit Suisse

FXStreet notes that below 1.2248, the cable finally confirms the looked for ‘double top’, and analysts at Credit Suisse continue to look for the core trend to turn lower.

“GBP/USD weakness has finally extended below key price support from April at 1.2248 to see the looked for ‘double top’ established to suggest the core trend is turning lower, reinforced by the RSI momentum top already in place.”

“The next key test of support is already underway at 1.2176/66 – the April low and 38.2% retracement of the March/April rally.” 

“Resistance is seen initially at the ‘neckline’ to the top at 1.2241/51, which we look to now ideally cap.”

12:16
European session review: GBP mixed as investors assess BoE governor's latest comments and UK's economic prospects

Time Country Event Period Previous value Forecast Actual
08:00 Eurozone ECB Economic Bulletin
08:00 France IEA Oil Market Report
10:30 United Kingdom BOE Gov Bailey Speaks


GBP traded mixed against its major counterparts in the European session on Thursday as investors digested the latest comments of the Bank of England's (BoE) governor Bailey and continued to assess the prospects of the UK's economy after yesterday's release of the gloomy Q1 GDP data. The pound demonstrated declines against USD, JPY and CAD, gains against AUD and NZD and little change against CHF and EUR.

The BoE's governor Andrew Bailey said on Thursday that it is unquestionably that the UK's economy is "in a major downturn" and the downturn could be "30%, more or less". He also suggested that "there will be a re-opening of the economy later". At the same time, Bailey noted that markets have calmed down since central bank action took place, but underlying fragility still remains. He also reaffirmed that negative rates are not on the table at the moment, but added that "it's always wise not to rule anything out forever".

The Office for National Statistics (ONS) reported on Wednesday that the UK's GDP fell 2% q/q in the first quarter of 2020, which marked the worst decline since the global financial crisis of 2008. On a yearly basis, GDP decreased 1.6%, the biggest contraction since late 2009. Meanwhile, the National Institute for Economic And Social Research (NIESR) said its estimates showed that the UK's economy in the second quarter would collapse by about 25-30% due to the lockdown imposed to slow the spread of the coronavirus.

The COVID-19 situation and uncertainty over ongoing post-Brexit trade talks also continued to weigh on the pound. The UK's coronavirus death toll passed 40,000, cementing the country as the worst-affected one in Europe.

11:47
AUD/USD: Near-term risks are to 0.6300/50 – Westpac

FXStreet reports that economists at Westpac note that Australia’s Covid-19 trend is very encouraging but brutal economic data globally and China tensions suggest near-term risks are to 0.6300/50.

“The headline unemployment rate only rose 1ppt to 6.2% but the underemployment rate of 13.7% is more indicative of the Q2 slump in activity, as is -9.2% for hours worked.”

“Australia’s export outlook remains worrisome and now agriculture such as barley and beef is being threatened by China bans. China’s relations with the US are also deteriorating by the day.”

“AUD/USD rallies should falter in the mid-0.65s, with risks to 0.6300/50.”

11:29
U.S. president Trump reiterates that he won't renegotiate China trade deal - Fox Business

  • Says that he could tax companies that make products outside of U.S.
  • China will try to get vaccine first, but "we can stop them"
  • The information we have on China about the virus is "not good"
  • Coronavirus outbreak shows that era of globalization is over


11:25
UK: Major downgrade to the GDP forecast – ABN Amro

UK: Major downgrade to the GDP forecast – ABN Amro

FXStreet reports that economists at ABN Amro have significantly downgraded the UK GDP forecast as most of the lockdown-related weakness is expected to come in Q2.

“For 2020, we expect the economy to contract by -8.5% (previously: -4.9%), with 2021 revised up on base effects, to 5.2% (previously: 2.3%).”

“Given this very weak GDP outlook, we continue to expect the BoE to increase its QE asset purchases target by at least GBP100bn at the next MPC meeting on 18 June, with the risk that it moves to the unlimited asset purchase model that has been adopted by the Fed.”


11:11
BoE's governor Bailey: Negative rates is not something we're contemplating

  • But it's always wise not to rule anything out forever
  • It would require extensive communications exercise to pursue negative rates
  • It is a very big step, create problems for banks
  • Doesn't see evidence that there is going to be rapid rise in inflation

11:00
EUR/USD: Below 1.0781/66 will mark a more important break lower – Credit Suisse

FXStreet reports that according to Credit Suisse, the spotlight turns back to the uptrend from March, today seen at 1.0781, with an eventual break expected.

“We look for a retest of the uptrend from March, today seen at 1.0781. Below here, the 1.0766 low of last week is needed to see the broader risk turn lower to suggest we may finally be seeing a more sustained down move, to expose the April low at 1.0727.”

“Resistance is seen at 1.0825/30 initially, with the 13-day average at 1.0841 now ideally capping to keep the immediate risk lower.”

10:50
BOE's governor Bailey: We are in a major downturn, there is no question about that
  • Says that markets have calmed down in the past few weeks
  • But there is still underlying fragility in market conditions
  • Whether the downturn is 30%, or more or less - who knows
  • It is reasonable to think there will be a reopening of the economy later
  • It is clear that risks are to the downside
  • There is a huge amount of uncertainty about economic scarring
10:47
Company News: Cisco Systems (CSCO) quarterly results beat analysts’ expectations

Cisco Systems (CSCO) reported Q3 FY 2020 earnings of $0.79 per share (versus $0.78 per share in Q3 FY 2019), beating analysts' consensus estimate of $0.71 per share.

The company's quarterly revenues amounted to $11.983 bln (-7.5% y/y), beating analysts' consensus estimate of $11.849 bln.

The company also issued guidance for Q4 FY 2020, projecting EPS of $0.72-0.74 (versus analysts' consensus estimate of $0.70) and revenues of -8.5-11.5% y/y, which we compute as $11.884-12.287 bln (versus analysts' consensus estimate of $11.96 bln).

CSCO rose to $43.21 (+3.00%) in pre-market trading.

10:33
NZD/USD: Bearish for the week ahead – Westpac

FXStreet reports that economists at Westpac apprise that global sentiment rolling over, and the RBNZ’s dovish hints on the OCR yesterday, will weigh on the NZD during the week ahead.

“NZD/USD is testing the lower bound of a two-month-old channel. Should it break, a multi-week target of 0.5800 would be signalled.”

“The RBNZ MPS was negative for the NZD. The RBNZ’s openness to a negative OCR if needed in future, has caused markets to price a 50% chance of that happening by mid-2021.”

“Today’s Budget revealed the Treasury expects net core crown debt to rise to 54% of GDP by 2023 – slightly higher than the 50% we had expected. The NZD reaction to the announcement was negligible, but if anything, it’s slightly supportive.”

“We remain bearish the NZD for the week ahead.”

10:14
U.S. president Trump: I feel strongly we should have negative rates - Fox Business

  • It is a great time to have a strong dollar
  • We're paying zero interest, that has never happened
  • Everybody wants to be in the dollar because we kept it strong
  • If other countries are going to have negative rates, we should too
  • Expects economic rebound in Q3
  • Calls it a "transition to greatness"
  • Says that he is "very disappointed" in China

09:58
Eurozone: Deeper eurozone recession raises spectre of deflation – ABN Amro

FXStreet reports that economists at ABN Amro have lowered the outlook for growth and inflation in 2020 and 2021 in the eurozone.

"Annual GDP growth forecast for 2020 has been lowered to -6.9%, down from -4.3%."

"Annual growth in 2021 now is expected to be 3.2%, up from an earlier expected 1.6%. At the end of our forecasting horizon (2021Q4) we expect GDP to be more than 3% below its 2019Q4 level (was -1.7% in our previous forecasts) and to be around 6% below the trend-level."

"We expect core inflation to slide over the coming quarters end next year at levels that are not far from zero."

"A recovery begins in Q3 with headline inflation reaching around 1.5% by the middle of next year. It then falls back down to around 0.5% by the end of 2021."

09:39
China foreign direct investment grew in April

RTTNews reports that foreign direct investment to mainland China grew in April, as the country attempts to recover from the coronavirus, or Covid-19, pandemic, official data showed on Thursday.

Foreign direct investment rose 8.6 percent year-on-year in U.S. dollar terms in April, the state-run news agency Xinhua reported citing data from the Ministry of Commerce.

Foreign investment totaled $10.14 billion during the month.

In yuan terms, FDI increased 11.8 percent year-on-year to CNY 70.36 billion.

However, foreign investment decreased by 8.4 percent year-on-year in the January to April period to $41.34 billion, due to the Covid-19 impact.

09:19
Japan prime minister Abe announces decision to lift state of emergency in 39 prefectures

  • State of emergency to remain in 8 prefectures, including Tokyo, Osaka, Hokkaido

  • If possible, will not wait until end of the month to lift remaining restrictions

  • Warns against a second wave of infections like seen in Singapore, South Korea

09:17
WTO head expected to step down early: source

Reuters reports that the head of the World Trade Organization is expected to step down earlier than planned, a Geneva-based source said, and has summoned a virtual meeting to inform national members on Thursday afternoon.

Brazilian Roberto Azevedo, 62, has been director-general at the Geneva-based trade body since 2013 and was on a second term of office due to conclude at the end of August 2021.

The heads of delegations of the WTO's 164 members were called to a special meeting to be held at 4 p.m. (1400 GMT) on Thursday to inform them about "pressing WTO administrative issues".

The WTO said it would have an announcement following the meeting, but would not comment until then.

09:00
Fed: Negative rates not impossible, but still unlikely – ABN Amro

FXStreet reports that Bill Diviney, a Senior Economist at ABN Amro, believes the chances of imposing negative rates by the Fed are not impossible, but still unlikely.

"While there are certain circumstances in which negative rates become a viable option for the Fed, for the time being they look unlikely - at least not before other policy options are exhausted."

"We think more likely options for a Fed wanting to provide more accommodation include: expanding the breadth and pace of asset purchases, stronger forward guidance, and potentially caps on bond yields."

08:41
ECB Economic Bulletin: Survey indicators suggest a sharp contraction in economic growth and a profound deterioration in labour market conditions

  • The euro area is facing an economic contraction of a magnitude and speed that are unprecedented in peacetime.

  • Measures to contain the spread of the coronavirus (COVID-19) have largely halted economic activity in all the countries of the euro area and across the globe.

  • Euro area GDP could fall by between 5% and 12% this year, depending crucially on the duration of the containment measures and the success of policies to mitigate the economic consequences for businesses and workers.

  • As the containment measures are gradually lifted, these scenarios foresee a recovery in economic activity, although its speed and scale remain highly uncertain.

  • The variability depends on the duration of lockdown measures, success of policies

  • Headline inflation is likely to decline further in the coming months

  • An ample degree of monetary accommodation is necessary for the robust convergence of inflation to levels that are below, but close to, 2% over the medium-term

08:31
A resurgence of coronavirus cases will have ‘major consequences’ for the oil market, International Energy Agency (IEA) warns

CNBC reports that the International Energy Agency (IEA) said that market forces had "demonstrated their power" on the supply side of the oil market in recent weeks, but concerns remain over the potential for a second wave of Covid-19 infections.

"Oil production is reacting in a big way to market forces and economic activity is beginning a gradual-but-fragile recovery," the IEA said. "However, major uncertainties remain."

"The biggest is whether governments can ease the lockdown measures without sparking a resurgence of Covid-19 outbreaks," the Paris-based energy agency added.

Another risk, the group said, was whether oil producers OPEC and its non-OPEC allies, sometimes referred to as OPEC+, would achieve a high level of compliance with its agreed output cuts.

"These are big questions - and the answers we get in the coming weeks will have major consequences for the oil market," the IEA said.

In its closely-watched monthly report, the IEA's outlook for oil demand showed a fall of 8.6 million barrels per day (b/d) to 91.2 million b/d this year. That's 0.7 million b/d more than the group anticipated in its previous report.

This projected fall of oil consumption would be the biggest demand drop in history, the IEA said.

On the supply side, it expected a "spectacular" fall of 12 million b/d this month, falling to a nine-year low of 88 million b/d.

The IEA said output cuts from countries outside the OPEC+ agreement, such as the U.S. and Canada, meant output was 3 million b/d lower in April than at the start of the year. The group said it could be 4 million b/d lower in June, "with perhaps more to come."

08:21
Australia: RBA is scaling back QE purchases amidst record drop in employment – MUFG

FXStreet reports that even in countries that have imposed less strict lockdowns such as Australia, the hit to the economies has still been severe, per MUFG Bank.

"The Australian economy lost a record 594.3k jobs in April, and the unemployment rate jumped by 1 percentage point to 6.2%. Total hours worked collapsed by a record 9% capturing the huge hit to household incomes."

"The RBA has been scaling back policy support as financial market conditions improve, and has decided against buying government bonds this week."

"The RBNZ increased QE purchases to NZD60 billion from NZD33 billion and opened the door to negative rates."

"The widening policy divergence is reinforcing upward pressure on the AUD/NZD rate."

08:00
Gold: A darkening economic backdrop to support investor appetite for the yellow metal – ANZ

FXStreet reports that gold prices rallied as the US Fed urged more spending was required to avoid economic turmoil, strategists at ANZ Bank apprise.

"Chair Powell said additional fiscal support could be costly but worth it, amid significant downside risks to the economy. That pushed investors further into safe-haven assets."

"Global bonds rallied, with yields on US treasury bonds subsequently falling, which also increased the attractiveness of gold."

"Earlier in the week, signs of deflation had also boosted support for gold. Consumer prices in Sweden fell -0.4% in April, while US CPI declined the most on record."

07:55
BOJ governor Kuroda: It is not necessary to cut rates further now

  • But there is still room to cut rates further if needed

  • BOJ will not hesitate to ease further if needed

  • BOJ has many tools, measures to deploy if needed

  • Does not think that price target will be met soon

  • BOJ may have to continue easing in the coming years

  • Financial system remains stable

07:53
China faces increasing downward pressure on foreign trade this year: commerce ministry

Reuters reports that China faces increasing downward pressure on foreign trade this year due to the huge shock the coronavirus pandemic has caused to the world economy and global supply chains, the commerce ministry said on Thursday.

The impact is especially pronounced for medium-sized and small firms and labour-intensive sectors, said ministry spokesman Gao Feng during a weekly press conference.

07:41
Goldman Sachs says a second wave of coronavirus could make the Fed rethink negative interest rates

CNBC reports that another "big setback" in the U.S. economy could prompt the Federal Reserve to consider cutting interest rates into negative territory - but such a monetary policy wouldn't be "very helpful," a Goldman Sachs strategist said.

Fed Chairman Jerome Powell on Wednesday reiterated that the central bank is not considering negative interest rates at this point, even as other central banks - such as the Bank of England - appeared to be opened to the idea.

When asked what could change the Fed's mind on negative interest rates, Zach Pandl, Goldman Sachs' co-head of global foreign exchange, rates and emerging markets strategy, raised the possibility of a second wave of coronavirus cases that could derail the upcoming economic recovery that many analysts and investors have expected.

"If the economy has another big setback ... where you have a second wave of infections and it would really take the recovery off course, then I do think that that opens up a possibility of a range of additional actions," he told CNBC.

However, "even in that scenario, I think fiscal policy would be the first step. I don't think that cutting rates to negative territory would potentially be very helpful even in that environment," he said.

"But who knows, policymakers are going to want to try new things if the economy is really struggling for a period of time," he added. "So in that scenario, perhaps they can consider it, otherwise I think it's pretty low probability at this point."

07:21
USD/JPY: Fair-value model suggests USD/JPY to pivot around 107 level - NAB

eFXdata reports that NAB Research discusses USD/JPY outlook and notes that its fair value model favors the view that USD/JPY is likely to pivot around the 107 level in the near term. NAB targets USD/JPY around 109 in Q3 and Q4.

"Our forecast that sees the pair edging back towards ¥109 as we head towards the second half of 2020 is predicated on our base case scenario that sees a global economic recovery on a strong footing in the second half of this year. This implies buoyancy in equity markets along higher core global yields. Still, we are living in unprecedented times with an elevated level of uncertainty.

Thus, we expect more spikes in risk aversion that should result in USD/JPY dips such as the one we experienced in the past fortnight. 'Known unknows' such the potential risk of a second COVID-19 wave of infection alongside US China tensions (which are unlikely to go away and may well intensify ahead of the US Presidential election), are potential sources of volatility and on a worse case they could derail our base case for a global economic recovery," NAB notes.

"Asset managers' long JPY positioning has also caught our attention. Positioning is now the longest since 2013 and the unwind risk is a potential upside for USD/JPY, if it eventuates. Medium term we are also keeping a close eye on central banks' balance expansion, the recent Fed aggressiveness, if sustained is a potential headwind for USD/JPY," NAB adds.

07:01
Asian session review: the dollar rose against the euro, but fell against the yen

Time Country Event Period Previous value Forecast Actual
01:00 Australia Consumer Inflation Expectation May 4.6% 3.4%
01:30 Australia Unemployment rate April 5.2% 8.3% 6.2%
01:30 Australia Changing the number of employed April 7 -575 -594.3
06:00 Germany CPI, m/m April 0.1% 0.3% 0.4%
06:00 Japan Prelim Machine Tool Orders, y/y April -40.7% -48.3%
06:00 Germany CPI, y/y April 1.4% 0.8% 0.9%
06:30 Switzerland Producer & Import Prices, y/y April -2.7% -4%


The US dollar rose against the euro and declined against the yen. At the same time, the dollar rose against the currencies of the Asia-Pacific region on the background of demand for safe haven assets due to the weak forecast for the US economy.

The US authorities will need to spend more resources to ensure that the rapid measures they took in response to the COVID-19 crisis did not go in vain, according to Fed Chairman Jerome Powell.

"The scale and speed of the current economic downturn is unprecedented, and the current recession is significantly worse than any since world war II," Powell said.

The recovery of the US economy, he said, will be gradual, and providing additional assistance to homeowners and businesses by the state is justified if it wants to avoid long-term damage to the economy.

The dollar was also supported by Powell's words that the Fed does not plan to make the rate negative.

The ICE Dollar index, which shows the value of the us dollar against six major world currencies, rose by 0.04% compared to the previous trading day.

06:44
Swiss producer and import price index fell by 1.3% in April

Federal Statistical Office said that the Producer and Import Price Index fell in April 2020 by 1.3% compared with the previous month, reaching 98.1 points (December 2015 = 100). The decline is due in particular to lower prices for petroleum products, petroleum and natural gas. Compared with April 2019, the price level of the whole range of domestic and imported products fell by 4.0%.

In particular, lower prices for petroleum products and scrap were responsible for the decrease in the Producer Price Index compared with the previous month. Irradiation, electromedical and electrotherapeutic equipment, non-ferrous metal products, general-purpose machinery and raw milk were also cheaper.

The Import Price Index registered lower prices compared with March 2020, particularly for petroleum products, petroleum and natural gas as well as non-ferrous metals and products made therefrom. Price decreases were also seen for machinery, electrical equipment, metal products, pharmaceutical preparations, furniture as well as medical and dental instruments and supplies.

06:30
Switzerland: Producer & Import Prices, y/y, April -4%
06:20
France's unemployment rate unexpectedly fell in the first quarter

According to the report from Insee, in Q1 2020, the number of ILO unemployed people decreased by 94,000 to 2.3 million people. The ILO unemployment rate thus fell by 0.3 points in the quarter to 7.8% of the labour force in France excluding Mayotte, after -0.3 points in the previous quarter. Experts expected an increase in unemployment to 8.5%. Last value was 0.9 points lower than its level one year earlier. In metropolitan France, it stood at 7.6%. The unemployment rate decreased for all age groups, and more strongly for men (-0.5 points) than for women (-0.1 points).

The fall in the unemployment rate resulted of a sharp fall in the number of jobless persons declaring themselves available or actively looking for work during the period of lockdown. The confinement period indeed strongly affected both active job search behaviour (for unemployed persons whose preferred sector of activity is at a standstill, for example), and availability of persons (childcare constraint, for example). Overall, ILO unemployment was therefore lower during this period of confinement, but this result did not reflect an improvement in the labour market.

In fact, an ILO unemployed person is a person aged 15 or over who meets the three following criteria: is unemployed during the reference week; is available for work in the next two weeks; has been actively looking for work in the last four weeks or has found a job starting within three months. Based on the observations over the first 11 weeks of the quarter, the effect of the confinement on the average unemployment rate in the first quarter was estimated at -0.4 percentage points. In other words, the unemployment rate that would have been observed in the first quarter in the absence of the confinement would have been virtually stable at 8.2%.

06:14
German consumer price growth slowed less than forecast in April

According to the report from Federal Statistical Office (Destatis), the inflation rate in Germany, measured as the year-on-year change in the consumer price index, stood at +0.9% in April 2020. This means that the inflation rate was down again (March 2020: +1.4%; February 2020: +1.7%). Economists had expected a 0.8% increase in April.

The prices of goods (total) increased by 0.3% between April 2019 and April 2020, which was below average. This was mainly due to a 5.8% decline in energy product prices. While the prices of mineral oil products recorded a decline, some other prices went up, for instance, electricity prices (+4.4%). Food prices also climbed substantially (+4.8%). The effects of the corona crisis were reflected especially by increasing fruit (+11.0%) and vegetable prices (+6.5%).

The prices of services (total) increased above average in April 2020 on the same month a year earlier (+1.3%). A major factor contributing to the development of service prices was the increase in net rents exclusive of heating expenses (+1.4%), as households spend a large part of their consumption expenditure on this item.

Compared with March 2020, the overall consumer price index was up 0.4% in April 2020. Economists had expected a 0.3% increase. The increasing food prices (+1.1%) are worth mentioning in this context. Compared with the previous month, consumers paid more especially for vegetables (+5.1%). However, the prices of energy products were down (-3.0%); above all motor fuels became less expensive (-8.3%).

06:01
Japan: Prelim Machine Tool Orders, y/y , April -48.3%
06:00
Germany: CPI, m/m, April 0.4% (forecast 0.3%)
06:00
Germany: CPI, y/y , April 0.9% (forecast 0.8%)
05:59
Coronavirus: Germany reports 933 new cases, global infections top 4.3 million
  • CNBC reports that more than 4.3 million people are the globe have now been infected with the coronavirus since an outbreak was first reported in China's Hubei province late last year.

  • Japan's Takeda Pharmaceutical said it could begin a clinical trial for a potential treatment as early as July.

  • The Australian Bureau of Statistics reported that as many as 594,300 jobs were lost in April and a large number of people left the labor force.


  • Global deaths: More than 296,600

  • Most cases reported: United States (over 1.38 million), Russia (over 242,200), United Kingdom (over 230,900), Spain (over 228,600), Italy (over 222,100)

05:52
Options levels on thursday, May 14, 2020 EURUSD GBPUSD

EUR/USD

Resistance levels (open interest**, contracts)

$1.0940 (1529)

$1.0910 (852)

$1.0885 (573)

Price at time of writing this review: $1.0805

Support levels (open interest**, contracts):

$1.0782 (1203)

$1.0762 (2259)

$1.0737 (2341)


Comments:

- Overall open interest on the CALL options and PUT options with the expiration date June, 5 is 87436 contracts (according to data from May, 13) with the maximum number of contracts with strike price $1,0600 (4070);


GBP/USD

Resistance levels (open interest**, contracts)

$1.2524 (1340)

$1.2447 (1202)

$1.2382 (637)

Price at time of writing this review: $1.2207

Support levels (open interest**, contracts):

$1.2139 (1221)

$1.2088 (1110)

$1.2057 (1633)


Comments:

- Overall open interest on the CALL options with the expiration date June, 5 is 23514 contracts, with the maximum number of contracts with strike price $1,3500 (3410);

- Overall open interest on the PUT options with the expiration date June, 5 is 26939 contracts, with the maximum number of contracts with strike price $1,3500 (3095);

- The ratio of PUT/CALL was 1.15 versus 1.12 from the previous trading day according to data from May, 13

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.

02:30
Commodities. Daily history for Wednesday, May 13, 2020
Raw materials Closed Change, %
Brent 28.73 -0.31
Silver 15.55 0.84
Gold 1715.079 0.75
Palladium 1828.98 -0.74
01:30
Australia: Unemployment rate, April 6.2% (forecast 8.3%)
01:30
Australia: Changing the number of employed, April -594.3 (forecast -575)
01:01
Australia: Consumer Inflation Expectation, May 3.4%
00:30
Stocks. Daily history for Wednesday, May 13, 2020
Index Change, points Closed Change, %
NIKKEI 225 -99.43 20267.05 -0.49
Hang Seng -65.38 24180.3 -0.27
KOSPI 18.25 1940.42 0.95
ASX 200 18.9 5421.9 0.35
FTSE 100 -90.72 5904.05 -1.51
DAX -276.84 10542.66 -2.56
CAC 40 -127.55 4344.95 -2.85
Dow Jones -516.81 23247.97 -2.17
S&P 500 -50.12 2820 -1.75
NASDAQ Composite -139.38 8863.17 -1.55
00:30
Schedule for today, Thursday, May 14, 2020
Time Country Event Period Previous value Forecast
01:00 Australia Consumer Inflation Expectation May 4.6%
01:30 Australia Unemployment rate April 5.2% 8.3%
01:30 Australia Changing the number of employed April 5.9 -575
06:00 Germany CPI, m/m April 0.1% 0.3%
06:00 Japan Prelim Machine Tool Orders, y/y April -40.8%
06:00 Germany CPI, y/y April 1.4% 0.8%
06:30 Switzerland Producer & Import Prices, y/y April -2.7%
08:00 Eurozone ECB Economic Bulletin
08:00 France IEA Oil Market Report
12:30 Canada Manufacturing Shipments (MoM) March 0.5% -5.7%
12:30 U.S. Continuing Jobless Claims May 22647 25100
12:30 U.S. Import Price Index April -2.3% -3.1%
12:30 U.S. Initial Jobless Claims May 3169 2500
14:00 Canada Bank of Canada publishes financial system review
17:00 U.S. FOMC Member Kashkari Speaks
22:00 U.S. FOMC Member Kaplan Speak
22:30 New Zealand Business NZ PMI March 53.2
00:15
Currencies. Daily history for Wednesday, May 13, 2020
Pare Closed Change, %
AUDUSD 0.64529 -0.34
EURJPY 115.81 -0.39
EURUSD 1.08179 -0.26
GBPJPY 130.933 -0.41
GBPUSD 1.22323 -0.28
NZDUSD 0.59914 -1.48
USDCAD 1.40934 0.14
USDCHF 0.97202 0.27
USDJPY 107.037 -0.14

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