Here is what you need to know on Friday, April 24:
The market mood is somewhat gloomy amid the EU Summit’s unambitious conclusion, Gilead’s inconclusive test for a coronavirus cure, and disappointing economic data. Global COVID-19 cases have topped 2.7 million and deaths are around 190,000. S&P futures are pointing down after the index erased its early gains on Thursday. Gold has been holding onto its gains and the dollar is in the lead.
EU Summit: EUR/USD erased its gains and tumbled down towards the monthly lows after EU leaders have failed to agree on a broad and imminent recovery package. They only settled for approving previous plans for a limited package and studying a larger fund in June, kicking the can down the road. North-south divisions remain significant despite a reported “good atmosphere” and German Chancellor Angela Merkel urged approving a “huge” package. French President Emmanuel Macron pushed for grants rather than loans.
Christine Lagarde, President of the European Central Bank, told leaders that the EU economies may shrink by 15% this year. Markit’s preliminary Purchasing Managers’ Indexes for April collapsed, with Services PMIs tumbling to the teens. The German IFO Business Climate for April published on Friday is projected to plummet as well.
Gloomy US data: Over 26 million Americans have already lost their jobs according to the latest jobless claims figures that showed more than four more people filed for unemployment benefits. See Jobless Claims drop for the third week: What defines progress?
Markit’s PMIs also showed a substantial deterioration in the economy. Friday’s highlight is Durable Goods Orders for March, which is set to tumble down. The University of Michigan’s final Consumer Sentiment measure for April is likely to be revised down.
See Durable Goods Orders Preview: Ominous portents for consumption
Coronavirus cure? A study conducted in China reportedly failed to confirm that Gilead’s Remdesivir drug is useful for treating COVID-19. The firm said that the results are premature, yet stocks dropped and the news weighed on the mood.
UK Prime Minister Boris Johnson is scheduled to return to full work at Downing Street on Monday. His government remains under scrutiny for handling the crisis and there is no end to the lockdown. The Services PMI crashed to 12.3 points. UK Retail Sales for March carry expectations for significant fall.
The Bank of Japan expanded its Quantitative Easing program by removing its bond-buying limits. The news temporarily boosted the market mood.
Oil prices have been holding onto their gains and recovering, with WTI trading at the $17 handle. US Treasury Steven Mnuchin has been considering a bailout to the US shale industry. The Chicago Mercantile Exchange hiked the margin requirements on contracts.
Cryptocurrencies have been holding onto their gains, with Bitcoin trading above $7,500.
More:
- Reopening: Timing is tough and two assets have more room to rise regardless
- Coronavirus: Lack of leadership may lead to L-shaped economy, markets may suffer badly
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