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Japan: Core Machinery Orders, y/y, March -0.7% (forecast -9.5%)
Japan: Core Machinery Orders, March -0.4% (forecast -7.1%)
New Zealand: Food Prices Index, y/y, April 4.4%
Schedule for tomorrow, Wednesday, May 20, 2020
Time Country Event Period Previous value Forecast
00:30 Australia Leading Index April -0.8%
06:00 United Kingdom Producer Price Index - Output (YoY) April 0.3% -0.4%
06:00 United Kingdom Producer Price Index - Input (YoY) April -2.9% -8.7%
06:00 United Kingdom Producer Price Index - Input (MoM) April -3.6% -4%
06:00 United Kingdom Producer Price Index - Output (MoM) April -0.2% -0.5%
06:00 United Kingdom Retail Price Index, m/m April 0.2% 0%
06:00 United Kingdom HICP ex EFAT, Y/Y April 1.6%
06:00 United Kingdom Retail prices, Y/Y April 2.6% 1.6%
06:00 United Kingdom HICP, m/m April 0% -0.1%
06:00 United Kingdom HICP, Y/Y April 1.5% 0.9%
08:00 Eurozone Current account, unadjusted, bln March 33.8
09:00 Eurozone Harmonized CPI April 0.5% 0.3%
09:00 Eurozone Harmonized CPI ex EFAT, Y/Y April 1% 0.9%
09:00 Eurozone Harmonized CPI, Y/Y April 0.7% 0.4%
12:30 Canada Wholesale Sales, m/m March 0.7% -3.8%
12:30 Canada Bank of Canada Consumer Price Index Core, y/y April 1.7%
12:30 Canada Consumer Price Index m / m April -0.6% -0.6%
12:30 Canada Consumer price index, y/y April 0.9% -0.1%
14:00 Eurozone Consumer Confidence May -22.7 -24
14:30 U.S. Crude Oil Inventories May -0.745
18:00 Canada Gov Council Member Lane Speaks
18:00 U.S. FOMC meeting minutes
23:50 Japan Trade Balance Total, bln April 4.9 -560
DJIA -0.34% 24,512.72 -84.65 Nasdaq +0.58% 9,288.58 +53.75 S&P +0.02% 2,954.58 +0.67
European stocks closed: FTSE 100 6,002.23 -46.36 -0.77% DAX 11,075.29 +16.42 +0.15% CAC 40 4,458.16 -40.18 -0.89%
Minneapolis Fed president Kashkari: Fed has other tools it can use before negative rates
  • U.S. has an extraordinary fiscal capacity to borrow and spend as needed to get through coronavirus crisis
  • Now is not the time to be cautious in spending
  • Strong growth in U.S. is probably a year or two away
Fed's chairman Powell: We are continuing to look at ways to accommodate additional borrowers
  • Says Fed is looking at extending borrowing to states with relatively low populations
  • Expects Main Street Lending Program and other outstanding facilities to be running by the end of May
  • Fed is getting good deal of interest in its facilities
  • Anything that keeps people out of insolvency should be considered by Congress
  • Important to consider virus impacts on state and local governments
  • Fed and Congress may need to do more to aid economy
UK's Chancellor Sunak: UK is facing a recession "likes of which we haven't seen"

  • Expects virus impact on labor market to be "severe"
  • Official forecasts point to double-digit jobless rate
  • Jury is out on what economy will look like after crisis
  • The longer the recession, the greater the likely scarring

ECB's chief economist Lane: We are fully prepared to further adjust our instruments if warranted
  • We must ensure our monetary stance provides sufficient accommodation and guards against the escalation of tail risks
  • Options including increasing size of PEPP and adjusting its composition, as much as necessary
  • APP and PEPP estimated to compress term premium by around 80 bps on 10 year
  • In all scenarios, a deep recession is envisaged. In a severe scenario, GDP would fall by 12% in 2020
AUD/USD: A potential breakout or backslide – TDS

FXStreet reports that analysts at TD Securities remain focused on the Aussie as the AUD/USD pair looks like close to either a potential breakout or backslide. 

“AUD/USD came to within a hair's width of taking out the end-April highs at 0.6570 during the European session. We would prefer not to see it break to a fresh high for this cycle. If it does, however, we think style will matter. We could probably live with a little peek that is followed quickly by a return to recent ranges.”

“A strong and sustained move above 0.6570 would make it harder to argue that we are heading lower any time soon. That would be amplified if this occurred on a daily closing basis. We would then have to look for a test of 0.6685, the spike-high from March 9 that printed just as things started to turn ugly for the AUD.”

White House economic adviser Kudlow: Looking at corporate tax rate cut - Fox

  • U.S. President Trump wants to see 7.6% payroll cut
  • Unemployment below 9% is possible this year
  • Does not believe that China would sell U.S. debt

U.S. Stocks open: Dow -0.29%, Nasdaq -0.01%, S&P -0.32%
Before the bell: S&P futures -0.23%, NASDAQ futures +0.11%

U.S. stock-index futures traded mixed on Tuesday, as investors' assessed quarterly earnings reports from Walmart (WMT; +3.5%) and Home Depot (HD; -1.4%), while awaiting the testimony from Fed Chair Powell and Treasury Secretary Mnuchin before the Senate Banking Committee on the government's response to the coronavirus (14:00 GMT).

Global Stocks:



Today's Change, points

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Hang Seng
























Crude oil






Precious Metals: A vaccine poses a major risk for gold bugs - TDS

FXStreet reports that analysts at TD Securities note that hopes of a vaccine catalyzed an aggressive bid in risk assets, but also led to a reversal of safe-haven flows which have kept the precious metals market afloat in recent weeks.

“Aside from the immediate implications for speculative flows, a vaccine could mitigate the need for a prolonged period of unprecedented policy support, which poses a key risk for gold bugs.”

“We continue to expect that amid extreme monetary inflation, capital will seek to shelter itself from a prolonged period of negative real rates following the pandemic.” 

“Downside momentum signals are deteriorating in the industrial-precious metals as their industrial component shifts from a headwind to a tailwind.”

Wall Street. Stocks before the bell

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

3M Co










Amazon.com Inc., NASDAQ





American Express Co










Apple Inc.





AT&T Inc





Boeing Co





Caterpillar Inc





Chevron Corp





Cisco Systems Inc





Citigroup Inc., NYSE





E. I. du Pont de Nemours and Co





Exxon Mobil Corp





Facebook, Inc.





FedEx Corporation, NYSE





Freeport-McMoRan Copper & Gold Inc., NYSE





Ford Motor Co.





General Motors Company, NYSE





Goldman Sachs





Google Inc.





Hewlett-Packard Co.





Home Depot Inc










Intel Corp





International Business Machines Co...





Johnson & Johnson





JPMorgan Chase and Co





McDonald's Corp





Merck & Co Inc





Microsoft Corp










Pfizer Inc





Starbucks Corporation, NASDAQ





Tesla Motors, Inc., NASDAQ





The Coca-Cola Co





Twitter, Inc., NYSE





UnitedHealth Group Inc





Verizon Communications Inc










Wal-Mart Stores Inc





Walt Disney Co





Yandex N.V., NASDAQ





Target price changes before the market open

Tesla (TSLA) target lowered to $1001 from $1020 at JMP Securities

Downgrades before the market open

Walt Disney (DIS) downgraded to Hold from Buy at Loop Capital

U.S. housing starts and building permits plunge in April

The Commerce Department reported on Tuesday the housing starts plunged by 30.2 percent m-o-m (the most on record) in April to a seasonally adjusted annual pace of 0.891 million (the lowest level since February 2015), while building permits tumbled by 20.8 percent m-o-m to an annual rate of 1.074 million (the lowest level since March 2015).

Economists had forecast housing starts decreasing to a pace of 0.927 million units last month and building permits declining to a pace of 1.000 million units.

Data for March was revised to show homebuilding growing to a pace of 1.276 million units, instead of increasing at a rate of 1.216 million units as previously reported.

According to the report, permits for single-family homes, the largest segment of the market, decreased 24.3 percent m-o-m to a rate of 669,000 million units in April (the lowest since March 2015), while approvals for the multi-family homes segment slumped 12.4 percent m-o-m to a 373,000 unit-rate (the lowest since Feb 2017).

In the meantime, groundbreaking on single-family homes slumped 25.4 percent m-o-m to a rate of 650,000 units in April (the lowest since March 2015), while housing starts for the multi-family plumped 40.3 percent m-o-m to a 234,000-unit pace (the lowest since April 2013).

U.S.: Building Permits, April 1.074 (forecast 1)
U.S.: Housing Starts, April 0.891 (forecast 0.927)
European session review: EUR sterngthens as Germany and France propose EUR500 bln recovery fund
Time Country Event Period Previous value Forecast Actual
09:00 Eurozone Construction Output, y/y March 0.2% -15.4%
09:00 Eurozone ZEW Economic Sentiment May 25.2 46.0
09:00 Germany ZEW Survey - Economic Sentiment May 28.2 32 51

EUR rose against most other major currencies in the European session on Tuesday after the leaders of France and Germany, Emmanuel Macron and Angela Merkel, proposed the creation of a EUR500 billion recovery fund "to support a sustainable recovery that restores and strengthens growth in the European Union".

According to a joint statement of German Chancellor Angela Merkel and French President Emmanuel Macron, issued on Monday, the fund is meant to be "ambitious, temporary and targeted" financed by money borrowed by the European Commission (EC) on capital markets "on behalf of the European Union" with guarantees from the Member States on favorable terms. The money would be distributed in the coming years as "budgetary expenditure" to the Member States and "the sectors and regions most affected".

The EC's chief Ursula von der Leyen said that the proposal is "constructive" and "acknowledges the scope and the size of the economic challenge that Europe faces". The EC is to present its proposal for the recovery fund next week.

S&P 500: Strength to extend – Credit Suisse

FXStreet notes that S&P 500 has gapped sharply higher for a close above the 61.8/% retracement of the Q1 collapse at 2934 and analysts at Credit Suisse look for a test of the pivotal resistance from the falling long-term 200-day average at 2998.

“Although volume was slightly lower than Friday’s high print it remains elevated and we look for the rally to extend.” 

“Resistance is seen at the beginning of the price gap from early March at 2986, then critically at the still falling 200-day average and Fibonacci projection resistance at 2994/98. If this strength from late March is still indeed a corrective move higher, then we would expect to see concerted signs of selling to show here.” 

“Support moves to 2941 initially, then 2934, with a break below 2914 needed to ease the immediate upside bias for a fall back to the lower end of yesterday’s price gap and 13-day average at 2883/65.”

Company News: Walmart (WMT) quarterly results beat analysts’ estimates

Walmart (WMT) reported Q1 FY 2021 earnings of $1.18 per share (versus $1.13 per share in Q1 FY 2020), beating analysts' consensus estimate of $1.09 per share.

The company's quarterly revenues amounted to $134.662 bln (+9.5% y/y), beating analysts' consensus estimate of $130.912 bln.

Due to unprecedented variability in the macro-environment brought on by COVID-19, the company withdrew its financial guidance for FY 2021.

WMT rose to $132.95 (+4.14%) in pre-market trading.

Japan: Further deterioration of the GDP on the cards – UOB

FXStreet reports that Alvin Liew, the senior economist at UOB Group, gives his opinion on the latest GDP figures in the Japanese economy.

“Japan’s 1Q 2020 GDP recorded another contraction but it was not as bad as expectations, at - 0.9% q/q (-3.4% annualized rate)… All major GDP segments (including private consumption, business spending, public demand, net exports and private inventories) declined, contributing to the 1Q weakness.”

“Despite the more benign 1Q decline, Japan’s outlook has definitely worsened in light of the COVID-19 pandemic and the measures taken to contain the spread, and we see Japan facing significant challenges due to the virus impact, on both trade and the domestic economy.”

“The real test of the severity of the COVID-19 driven GDP contraction will be in the current quarter, 2Q 2020. We have further revised our forecast of the 2Q contraction to be more severe, at -5% q/q (-18.6% annualized rate). This is slightly worse than the sharpest contraction Japan experienced during the great recession in 2008/2009 (at -4.8% q/q, -17.8% annualized rate in 1Q 2009) while some polls expect the contraction to exceed 20%, potentially the worst decline on record.”

“While the copious amounts of fiscal and monetary stimulus will help cushion some of the economic fallout, we believe it is inevitable Japan will enter a full recession this year. Based on the significant downgrade in the 2Q outlook, we now expect Japan full-year GDP to contract by 5.5% in 2020 (from +0.7% in 2019).”

EU recovery fund proposal “short-circuits” euro zone bond yields – Goldman Sachs

FXStreet reports that according to Goldman Sachs' analysts, the French and German proposed joint EUR500 billion ($547 billion) recovery fund will "short-circuit" Eurozone government bond yields for now and fuel a sharp drop in Italian and Spanish borrowing costs.

“The gap between German and Italian 10-year government bond yields should narrow to below 180 basis points, levels that were last traded in March.

The difference between German and Spanish yields should drop to sub 90 basis points from current levels of 121 bps.”

Japan's economy minister Nishimura: We will deploy all fiscal and monetary means to protect jobs and businesses

  • We must ensure Japan does not return to deflation by minding too much about the country's fiscal health

Japan's government prepares cash injections for small- to medium-size virus-hit companies - Nikkei reports, citing sources

According to the report, the Japanese government will set up a public-private fund to inject capital into small- to medium-size companies, hit by the fallout from the coronavirus outbreak.

The government plans to allocate over JPY50 billion (USD465 million) in the draft secondary budget later in June. The arrangement is aimed at supporting small businesses in the manufacturing, services and other industries that are considered indispensable to regional economies.

Japan's government will also call on private-sector financial institutions to offer loans.

Company News: Home Depot (HD) quarterly earnings miss analysts’ forecast

Home Depot (HD) reported Q1 FY 2020 earnings of $2.08 per share (versus $2.27 per share in Q1 FY 2019), missing analysts' consensus estimate of $2.27 per share.

The company's quarterly revenues amounted to $28.260 bln (+7.1% y/y), beating analysts' consensus estimate of $27.591 bln.

As a result of the uncertainty related to the duration of COVID-19 and its impact on the broader economy, the company suspended its previously communicated FY 2020 guidance.

HD fell to $238.50 (-2.79%) in pre-market trading.

Company News: Baidu (BIDU) quarterly results beat analysts’ expectations

Baidu (BIDU) reported Q1 FY 2020 earnings of RMB8.84 per share (versus RMB0.41 per share in Q1 FY 2019), beating analysts' consensus estimate of RMB3.98 per share.

The company's quarterly revenues amounted to RMB22.545 bln (-6.9% y/y), beating analysts' consensus estimate of RMB21.937 bln.

The company also issued in-line guidance for Q2 FY 2020, projecting revenues of RMB25.00-27.30 bln versus analysts' consensus estimate of RMB 25.62 bln.

BIDU rose to $115.38 (+7.24%) in pre-market trading.

EUR/CHF: A close above 1.0612 would see a double-bottom base completed – Credit Suisse

FXStreet reports that EUR/CHF has seen a sharp rebound higher and analysts at Credit Suisse believe the move has further to go in the short-term.

"A close above 1.0612 today would complete a small 'double bottom' base, with resistance then seen initially at 1.0656/62. Removal of here would suggest further strength, with resistance seen thereafter at 1.0704/17, the 38.2% retracement and 'measured base objective', where we would look for cap."

"Another rejection from 1.0662 would suggest the market is moving into a range, with support at 1.0602/0599, then 1.0565, ahead of 1.0505/00."

USD/CNH: Upside expected to meet resistance at 7.1560/7.1650 – UOB

FXStreet reports that FX Strategists at UOB Group noted occasional bullish attempts in USD/CNH are likely to meet a tough barrier in the 7.1560/7.1650 band.

24-hour view: "We expected USD to strengthen yesterday but were of the view 'any advance is likely limited to a test of 7.1400'. While the subsequent advance exceeded our expectation, the up-move was short-lived as USD dropped back quickly after touching a high of 7.1443. Upward momentum has dissipated and for today, USD is likely to consolidate and trade between 7.1050 and 7.1300."

Next 1-3 weeks: "Despite the relatively strong bounce last Friday (7.1337, +0.32%), upward momentum has not improved by much and it is too early to expect a sustained advance in USD. While USD could edge higher from here, any up-move is expected to encounter solid resistance at 7.1560 followed by the year-to-date high near 7.1650 which is acting as a formidable resistance. On the downside, a breach of 7.0800 would indicate the current mild upward pressure has eased."

Eurozone production in construction down by 14.1% in March - Eurostat

According to the report from Eurostat, in March 2020, the COVID-19 containment measures widely introduced by Member States had a significant impact on production in construction, as the seasonally adjusted production in the construction sector decreased by 14.1% in the euro area and by 12.0% in the EU, compared with February 2020. In February 2020, production in construction fell by 0.5% in the euro area and by 0.2% in the EU.

In March 2020 compared with March 2019, production in construction decreased by 15.4% in the euro area and by 13.4% in the EU.

In the euro area in March 2020, compared with February 2020, civil engineering decreased by 16.0% and building construction by 14.0%. In the EU, civil engineering decreased by 13.7% and building construction by 11.8%.

In the euro area in March 2020, compared with March 2019, civil engineering decreased by 17.2% and building construction by 15.2%. In the EU civil engineering decreased by 14.9% and building construction by 13.3%.

Germany’s indicator of economic sentiment rose sharply in May - ZEW

According to the report from ZEW, in May 2020, the ZEW Indicator of Economic Sentiment for Germany recorded an increase for the second time in a row, and now stands at 51.0 points, 22.8 points higher than in the previous month. Economists had expected an increase to 32.0.

In the current survey, the assessment of the economic situation in Germany, by contrast, continued to decrease slightly, with the corresponding indicator dropping 2.0 points to a new value of minus 93.5 points.

"Optimism is growing that there will be an economic turnaround from summer onwards. This is also reflected in the significant improvement in expectations for the individual sectors. According to the financial market experts surveyed, economic growth is expected to pick up pace again in the fourth quarter of 2020. However, the catching-up process will take a long time. Only in 2022 will economic output return to the level of 2019," comments ZEW President Professor Achim Wambach.

The financial market experts' sentiment concerning the economic development of the eurozone also experienced a considerable increase, with the corresponding indicator climbing 20.8 points to a current level of 46.0 points compared to the previous month. By contrast, the indicator for the current economic situation in the eurozone fell by 1.1 points to a new reading of minus 95.0 points.

The inflation indicator currently stands at minus 18.7 points, signalling that the financial market experts expect inflation to decline further in the coming six months.

Eurozone: Construction Output, y/y, March -14.1%
Eurozone: ZEW Economic Sentiment, May 46.0
Germany: ZEW Survey - Economic Sentiment, May 51 (forecast 32)
USD/JPY remains locked within the 106.30-107.80 band – UOB

FXStreet reports that prospects of further gains in USD/JPY have been losing traction in favour of a consolidative move in the next weeks, suggested FX Strategists at UOB Group.

24-hour view: "USD traded between 107.02 and 107.50 yesterday, narrower and higher than our expected range of 106.80/107.45. The underlying tone has improved somewhat and this could lead to USD edging higher even though a break of 107.80 is not expected (minor resistance is at 107.60). On the downside, a break of 107.10 would indicate the current mild upward pressure has eased."

Next 1-3 weeks: "After USD surged to 107.76 on Monday, we highlighted on Tuesday (12 Apr, spot at 107.45) that USD 'has to clear 107.80 first before further sustained advance can be expected'. We added, 'the prospect for such a scenario is quite high but in order to maintain the current build-up in momentum, USD should not move back below the 'strong support' level at 106.60 within these few days'. While 106.60 is still intact, the meandering price action over the past several days has dented the upward momentum. In other words, the prospect for USD to move above 107.80 has diminished considerably. From here, USD is more likely to trade between 106.30 and 107.80 for a period."

Bank of Japan to hold an unscheduled monetary policy meeting this week

The meeting will take place at 00:00 GMT on 22 May

The Bank of Japan says that the meeting is to discuss new measures to provide funds to financial institutions, following up on instructions by governor Kuroda from the 27 April meeting.

Nearly 20% of industrial companies are reorganising supply chains - Germany DIHK survey:

  • Nearly 50% of industrial companies are putting investments on hold, cutting budgets

  • 75% of industrial companies are reporting declining demand

  • About 80% expect substantial decline in sales

Stagflation and bubbles in 2021 – Natixis

FXStreet reports that for 2021, analysts at Natixis expect a situation of stagflation (sluggish growth, inflation) and financial and real estate asset price bubbles in OECD countries.

"Although OECD growth will be higher than long-term growth in 2021 (1.5%), it will probably not be very strong (3.5% to 4%)."

"Inflation in OECD countries is likely to be quite high in 2021, because certain categories of employees will receive wage increases (health, retail, transport, security), because commodity prices will recover, but above all because productivity is going to decline."

"The monetisation of public debt by central banks will give rise to a considerable amount of additional money created by central banks in 2020. The amount of this investable liquidity is such that there will be asset price bubbles, which will be larger than after the subprime crisis."

Asia stocks may not rise much further as fundamentals remain weak, Credit Suisse says

CNBC reports that Asian equities are expected to trade within a limited range in the near term, according to a strategist at Swiss investment bank Credit Suisse, who cited earnings trends that suggest that fundamentals remain weak.

Stocks rallied from earlier lows, driven in part by unprecedented policy stimulus from central banks around the world, Suresh Tantia, a senior investment strategist at the bank, told CNBC.

"We believe Asian equities will enter a consolidation in the near term," said Tantia in an email. When shares consolidate, they typically trade within a limited price range.

"The Fed's action has addressed the (U.S. dollar) funding stress, stalling USD strength which has reduced outflows from the region in April," he added.

As investor confidence in the stock market wobbled in March over the uncertainty from the coronavirus pandemic, the demand for U.S. dollars surged. That demand came from a variety of sources including banks, investors selling dollar-based assets and issuers of dollar-denominated debt. All that drove the greenback higher against other currencies, and led to the outflow of funds from Asia.

The Fed's actions helped prevent equities from falling further.

However, Tantia pointed out: "Though these factors have been able to put a floor under the markets, the fundamentals need to improve for regional equities to rally from current levels." The global recession will have "a severe impact on corporate profitability, leading analysts to lower their earnings expectations," he added.

Oil: Chinese demand brings hope – ANZ

FXStreet reports that a continued pick-up in economic activity in China is likely to keep sentiment positive as Crude Oil prices extended recent gains amid hopes of a viable vaccine for COVID-19, strategists at ANZ Bank brief.

"A Bloomberg report sighting officials in China's energy industry said that demand was almost back above pre-COVID-19 levels. At 13mbd, it was just shy of the 13.7mb/d level that was recorded in December 2019."

"Sentiment was supported by new successful trials of Moderna's experimental vaccine, which should show signs of creating an immune-system response to fend off the new coronavirus."

"The number of US shale oil rigs operating fell to a decade long low, while Russia pledged strict compliance with the OPEC+ supply agreement."

EU passenger car registrations collapsed in April - ACEA

According to the report from European Automobile Manufacturers' Association (ACEA), in April 2020, registrations of new passenger cars in the European Union posted a year-on-year decline of 76.3%. The first full month with COVID-19 restrictions in place resulted in the strongest monthly drop in car demand since records began.

In April 2020, registrations of new passenger cars in the European Union posted a year-on-year decline of 76.3%. The first full month with COVID-19 restrictions in place resulted in the strongest monthly drop in car demand since records began. With most showrooms across the EU closed for the entire month, the number of new cars sold fell from 1,143,046 units in April 2019 to 270,682 units last month.

Each of the 27 EU markets recorded double-digit declines in April, but Italy and Spain endured the biggest losses, with car registrations falling by 97.6% and 96.5% respectively. Looking at the other major markets, demand dropped by 61.1% in Germany, while France saw an 88.8% contraction in April.

From January to April 2020, EU demand for new passenger cars contracted by 38.5%, owing to the negative impact of the coronavirus on March and April results. So far this year, registrations fell by half in three of the four key EU markets: Italy -50.7%, Spain -48.9% and France -48.0%. In Germany, demand contracted by 31.0% over the first four months of 2020.

USD/CAD: Fluctuating around 1.40 on opposing factors - Danske

eFXdata reports that Danske Research adopts a bearish USD/CAD bias over the medium-term, expecting the pair to drop towards 1.38 in 3-months.

"USD/CAD has been fluctuating around the 1.40 level as the impact of higher oil has been offset by USD strength," Danske notes.

"Looking ahead, we still pencil in a lower cross as the reopening of the global economy contributes to stabilising commodity imbalances. That said, Canadian oil is notorious for having high B/E costs, meaning Canadian producers will be among the first to take the supply adjustment. This in turn should prove a persistent headwind to growth,"

Bank of Canada has cut its benchmark rate forcefully to 0.25%, which the central bank now deems the "effective lower bound". BoC has also launched lending operations and asset purchase programs in government, provincial and corporate bonds. COVID-19 figures have shown clear improvement and look better than the US," Danske adds.

Asian session review: the dollar fell against the euro and rose against the yen

Time Country Event Period Previous value Forecast Actual
01:30 Australia RBA Meeting's Minutes
04:30 Japan Industrial Production (MoM) March -0.3% -3.7% -3.7%
04:30 Japan Industrial Production (YoY) March -5.7% -5.2% -5.2%
06:00 United Kingdom Average earnings ex bonuses, 3 m/y March 2.9% 2.6% 2.7%
06:00 United Kingdom Average Earnings, 3m/y March 2.8% 2.6% 2.4%
06:00 United Kingdom ILO Unemployment Rate March 4% 4.4% 3.9%
06:00 United Kingdom Claimant count April 12.1 676.5 856.5

The US dollar declined against the euro and strengthened against the yen. News of progress in the development of the COVID-19 coronavirus vaccine weakens demand for the dollar, as well as other "safe haven" assets, experts say. In this regard, the US dollar declined against the australian dollar and some Asian currencies.

Optimism associated with the gradual opening of economies around the world, as well as news of progress in the development of a vaccine, weaken the dollar, experts say.

Earlier, the American biotechnology company Moderna Inc. announced that the initial stage of testing the vaccine against COVID-19 in humans has yielded positive results. The company said that during the first phase of clinical trials involving 45 people, the vaccine proved to be "generally safe and well-tolerated."

Overcoming the pandemic with a vaccine or finding more effective treatments for COVID-19 could pave the way for a faster recovery in economic activity, experts say.

The ICE index, which tracks the dollar's performance against six currencies (the euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona), fell 0.24%.

Global downturn risks becoming prolonged recession, WEF says

Bloomberg reports that according to the World Economic Forum, leaders need to do more to secure a quick and sustainable recovery for the global economy.

In a survey of almost 350 risk professionals, the Geneva-based group said that two-thirds identified a drawn-out downturn as the greatest risk now facing the world over the coming year and a half. The pandemic has already thrown the economy into its deepest recession since the Great Depression and provoked a massive monetary and fiscal response.

The resulting build-up of debt will likely burden government budgets and companies for years, the report said. A reduction in consumption, as well as changing production and competition patterns, could also hit businesses, and emerging economies could be submerged into deeper crisis, the report said.

High unemployment, especially among the young, a lack of progress in reducing carbon emissions and exacerbated inequalities are all possible side effects of the pandemic, too. Cyberattacks and data fraud are also major threats as the economy becomes further digitized, the report showed.

UK government announces plan for £30 billion tariff cuts after Brexit

  • Global tariffs to replace EU common external tariffs starting from 1 January 2021

  • Tariffs to be maintained for agricultural products like beef, lamb, poultry

  • 10% tariff on cars will also be maintained

  • Almost all pharmaceuticals, medical devices will be tariff free

UK unemployment rate unexpectedly fell for the three months to March 2020

Office for National Statistics said, the UK unemployment rate for the three months to March 2020 was estimated at 3.9%, 0.1 percentage points higher than a year earlier and 0.1 percentage points higher than the previous quarter. Economists had expected an increase to 4.4%.

The UK employment rate in the three months to March 2020 was estimated at a joint-record high of 76.6%, 0.6 percentage points higher than a year earlier and 0.2 percentage points up on the previous quarter.

The total number of weekly hours worked in the three months to March 2020 was 1,040.6 million, 12.4 million hours less than the previous year.

In real terms (after adjusting for inflation), annual earnings growth was estimated to be 0.7% in total pay and 1.0% in regular pay, in the three months to March 2020, both down from a recent peak of 2.0% in the three months to June 2019.

There were an estimated 637,000 vacancies in the UK in February to April 2020; this is 170,000 fewer than the previous quarter and 210,000 fewer than a year earlier.

The number of paid employees in the UK in March 2020 grew by 0.4%, compared with the same period of the previous year.

Early estimates for April 2020 indicate that the number of paid employees fell by 1.2% compared with April 2019 and fell by 1.6% when compared with March 2020.

Median monthly pay grew by 2.7% in March 2020, compared with the same period of the previous year.

Early estimates for April 2020 indicate that median monthly pay fell by 0.9% compared with the same period of the previous year.

United Kingdom: Average Earnings, 3m/y , March 2.4% (forecast 2.6%)
United Kingdom: ILO Unemployment Rate, March 3.9% (forecast 4.4%)
United Kingdom: Average earnings ex bonuses, 3 m/y, March 2.7% (forecast 2.6%)
United Kingdom: Claimant count , April 856.5 (forecast 676.5)
Coronavirus: India’s cases top 100,000; Trump threatens to withdraw from WHO
  • World leaders met virtually Monday at the World Health Organization's 73rd World Health Assembly to discuss and set priorities for the next year. At the assembly, South Korean President Moon Jae-in called for greater authority to be vested in the WHO to deal with emerging diseases, while HHS Secretary Alex Azar called the WHO's response to the coronavirus a failure that "cost many lives."

  • Biotech company Moderna released data on its closely watched phase 1 human trial for its coronavirus vaccine candidate. The data appears to be positive and shares of the company skyrocketed, lifting the overall market.

  • Global cases: More than 4.8 million

  • Global deaths: At least 318,534

  • Most cases reported: United States (More than 1.5 million), Russia (290,678), Brazil, (255,368), United Kingdom (247,709), Spain (231,606).

Options levels on tuesday, May 19, 2020 EURUSD GBPUSD


Resistance levels (open interest**, contracts)

$1.0977 (1506)

$1.0958 (829)

$1.0945 (623)

Price at time of writing this review: $1.0914

Support levels (open interest**, contracts):

$1.0868 (734)

$1.0843 (1205)

$1.0812 (2288)


- Overall open interest on the CALL options and PUT options with the expiration date June, 5 is 90849 contracts (according to data from May, 18) with the maximum number of contracts with strike price $1,0600 (4736);


Resistance levels (open interest**, contracts)

$1.2431 (1199)

$1.2359 (645)

$1.2305 (322)

Price at time of writing this review: $1.2196

Support levels (open interest**, contracts):

$1.2134 (1211)

$1.2088 (1059)

$1.2060 (1408)


- Overall open interest on the CALL options with the expiration date June, 5 is 23486 contracts, with the maximum number of contracts with strike price $1,3500 (3420);

- Overall open interest on the PUT options with the expiration date June, 5 is 29074 contracts, with the maximum number of contracts with strike price $1,3500 (3095);

- The ratio of PUT/CALL was 1.24 versus 1.23 from the previous trading day according to data from May, 18

* - 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.

Japan: Industrial Production (YoY), March -5.2% (forecast -5.2%)
Japan: Industrial Production (MoM) , March -3.7% (forecast -3.7%)
Commodities. Daily history for Monday, May 18, 2020
Raw materials Closed Change, %
Brent 35.28 8.49
Silver 16.92 1.81
Gold 1732.224 -0.63
Palladium 2000.88 7.14
Stocks. Daily history for Monday, May 18, 2020
Index Change, points Closed Change, %
NIKKEI 225 96.26 20133.73 0.48
Hang Seng 137.3 23934.77 0.58
KOSPI 9.83 1937.11 0.51
ASX 200 55.7 5460.5 1.03
FTSE 100 248.82 6048.59 4.29
DAX 593.7 11058.87 5.67
CAC 40 220.71 4498.34 5.16
Dow Jones 911.95 24597.37 3.85
S&P 500 90.21 2953.91 3.15
NASDAQ Composite 220.27 9234.83 2.44
Schedule for today, Tuesday, May 19, 2020
Time Country Event Period Previous value Forecast
01:30 Australia RBA Meeting's Minutes
04:30 Japan Industrial Production (MoM) March -0.3% -3.7%
04:30 Japan Industrial Production (YoY) March -5.7% -5.2%
06:00 United Kingdom Average earnings ex bonuses, 3 m/y March 2.9% 2.6%
06:00 United Kingdom Average Earnings, 3m/y March 2.8% 2.7%
06:00 United Kingdom ILO Unemployment Rate March 4% 4.4%
06:00 United Kingdom Claimant count April 12.2 150
09:00 Eurozone Construction Output, y/y March -0.9%
09:00 Eurozone ZEW Economic Sentiment May 25.2
09:00 Germany ZEW Survey - Economic Sentiment May 28.2 33.5
12:30 U.S. Housing Starts April 1.216 0.95
12:30 U.S. Building Permits April 1.350 1
14:00 U.S. Fed Chair Powell Testimony
18:00 U.S. FOMC Member Rosengren Speaks
22:45 New Zealand Food Prices Index, y/y April 3.3%
23:50 Japan Core Machinery Orders, y/y March -2.4% -9.5%
23:50 Japan Core Machinery Orders March 2.3% -7.1%
Currencies. Daily history for Monday, May 18, 2020
Pare Closed Change, %
AUDUSD 0.65153 1.58
EURJPY 117.112 1.04
EURUSD 1.09144 0.9
GBPJPY 130.838 0.96
GBPUSD 1.21949 0.82
NZDUSD 0.60324 1.71
USDCAD 1.39414 -1.19
USDCHF 0.97168 -0
USDJPY 107.286 0.13

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