Current Risks for Developed Economies
Oil prices are rising while the US government is on the verge of shutting down. How will it affect the market?
What moves the market on April 9?
Here are the most important topics that will determine the dynamics of currencies, commodities and stocks on Thursday, April 9. Notice that volatility is expected to rise during the day providing opportunities for active traders.
Coronavirus. According to the latest data from Europe, Italy and Spain both recorded the most new cases in days, while the UK announced a record number of coronavirus deaths. Prime Minister Boris Johnson remains in intensive care, although his condition has improved. Be ready for the extension of the lockdown period. Notice, however, that both forecasts from Italian and Spanish governments and experts said that the peak of the virus could come within days. These expectations will likely support the market sentiment and, consequently, riskier assets such as the AUD, the NZD, exotic currencies, and stocks.
Dismal economic forecasts. Analysts compete with each other in negativity about the futures of the global economy. The World Trade Organization said on Wednesday that the pandemic could cause a bigger damage of international trade flows than at any point in the postwar era. Wall Street banks went further and provided a number: according to them, the coronavirus will reduce the world's GDP growth by more than $5 trillion over the next two years. This number exceeds the annual output of Japan.
US jobless claims. Today we’ll get another update on the indicator that has recently reached unprecedented levels. Forecasts are that there will be 5 million new claims after a total of nearly 10 million claims over the past two weeks. Don’t expect the USD to take a hit after the release: everyone is ready for such a number and the greenback remains the safe-haven of choice.
European failure. There’s no relief for the EUR as European Union finance ministers failed in all-night talks to agree on more economic support for the region’s economies. The negotiations will resume at 18:00 GMT on Thursday. If something is announced late during the day, it will be able to cause big moves in EUR/USD as the amount of liquidity will be lower ahead of the US bank holiday on Friday. So far, the pair has been limited by the 100-period MA at 1.0880 (H4), while support is at 1.0835 and 1.0805.
OPEC+ meeting. The pandemic won’t keep the world’s top oil producers from discussing the output cut: a video conference is scheduled for 15.00 MT time. There have been positive signals from Russia regarding the deal. Brent is consolidating in the $33.00 area. The deal will make the price jump above $45, while the failure will trigger a decline towards $23.50 and $21.65.
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