2020-04-30 • Updated
On April 30 at 14:45 MT time the ECB will unveil its future measures to support the euro zone economy. The press conference will start at 15:30 MT time.
Rates will stay unchanged as the reduction would have little impact. All that remains is to buy extra assets, so called “junk” bonds through its Pandemic Emergency Purchase Program (PEPP). The ECB can remove the cap of its bond purchases or increase the present amount, which is 750 billion euro now. Also the bank can start buying bonds of fallen angels, companies who lost their investment grades during the corona crisis.
These decisions are the bone of contention between the Eurozone member states. On the one hand, it will help poorer states such as Greece, Italy, Spain to borrow money under more favorable conditions. On the other hand, it will be too risky for Germany and Netherlands as borrowers can fail to repay their debts.
Also the ECB can discuss the Targeted Longer Term Refinancing Operations (LTRO), that provide banks with money to lend to customers. Governors can offer banks even more loans, and more cheaply.
If the ECB leaves everything unchanged, the EUR/USD will fall to 1.0765.
If the ECB decides to buy fallen angels and extend LTRO, it will push EUR/USD higher to 1.09.
If the ECB expands quantitative easing, EUR/USD will drop at first, but then stabilize.
If ECB increases the size of PEPP, EUR/USD will surge toward the key resistance near 1.10.
China has issued new oil product export quotas to allow oil companies to send surplus barrels overseas, particularly Sinopec, which has the highest volume among quota holders. While the exact quota volume remains undisclosed, oil companies are forecasted to export approximately 3.5 million metric tons of clean oil products in September, a 10% increase from August.
Thanks to the incredible advancements in horizontal drilling and fracking technology, the United States has experienced a mind-blowing shale revolution. They've become the heavyweight champion of crude oil production, leaving Saudi Arabia and Russia in the dust. They even turned the tables and became net exporters of refined petroleum products in 2011.
Oil prices rebounded slightly on Friday but are still expected to show losses for the week due to concerns about slowing growth in the US and China. US crude futures rose 2.7% to $70.41 per barrel, while the Brent contract increased by 2.5% to $74.33 per barrel.
The past several weeks have been a real triumph for the bulls in the oil market. The Brent spot price grew by 8.5% during the last month.
Gold prices are rising for three consecutive days ahead of the Federal Reserve (Fed) interest rate decision, which is expected to remain unchanged due to declining inflation and a positive economic outlook. Investors are keen on the Fed's interest rate guidance, fearing a hawkish stance that could trigger market risk aversion.
Amid concerns of a Chinese economic slowdown, reports of declining investment often overlook China's efficient investment strategy in emerging sectors for long-term growth. China has taken measures to stabilize foreign and private sector investments, like reducing the reserve requirement ratio to boost investor confidence.
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