Weekly market review April 6-10, 2020

April 6, 2020
Weekly market review April 6-10, 2020

The number of confirmed cases of COVID-19 infection has increased significantly over the past week, especially in the USA and Europe, which put downward pressure on risky assets and contributed to the strengthening of the dollar as a result of increased demand for US bonds.

The number of global confirmed cases of coronavirus exceeded 1 million 200 thousand, and the number of deaths exceeded 69 thousand. Donald Trump said that the peak of the epidemic in the United States could be reached in mid-April.

US employment data presented last week were significantly worse than expected, however, the dollar strengthened as a result of increased demand for safe-haven assets. Non-farm payrolls decreased by 701 thousand in March, while a decrease of 100 thousand was expected. The unemployment rate rose to 4.4% with a forecast of 3.8%.

The stock market index US 500 managed to hold above the significant support level 2460, which became an insurmountable barrier for bears. Price needs to break above 2640 resistance level for the development of the uptrend. The dollar has restored a significant part of the positions lost a week earlier.

Effect on Saudi Arabia

The price of oil soared by 39% over the past week amid Trump’s statement that Russia and Saudi Arabia are ready to cut oil production by 10-15 million barrels per day. The extraordinary OPEC+ summit that Saudi Arabia planned to convene on Monday was postponed until April 9 due to disagreements between Saudi Arabia and Russia. The conclusion of an agreement on production cuts may increase the price of oil.

Main events of the week

  • On Monday, UK construction PMI will be published.
  • On Tuesday, the Reserve Bank of Australia will hold a monetary policy meeting. Canada’s purchasing managers’ index will also be presented.
  • On Wednesday, Fed minutes will be published and crude oil inventories will be released.
  • On Thursday, UK GDP and manufacturing PMI will be presented, as well as US jobless claims and producer price index and Canada employment change.
  • On Friday, the US consumer price index will be published. On this day, the markets will operate in conditions of low liquidity due to the Good Friday holiday in the USA and Europe.

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Categories: Analysis

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