Trading Week Ahead: 27th April-1st May 2020
Key Events and Data Releases This Week
New Zealand Bank Holiday
JPY BOJ Outlook Report, Monetary Policy Statement
EUR Spanish Unemployment Rate
USD CB Consumer Confidence
AUD Australian CPI Trimmed Mean CPI
USD US Advance GDP
USD FOMC Statement, Federal Funds Rate, FOMC Press Conference
RMB Chinese Manufacturing PMI
EUR Main Refinancing Rate, Monetary Policy Statement, ECB Press Conference
CAD Canadian GDP
USD US Unemployment Claims
Bank Holiday - China, France, Switzerland, Italy
USD US ISM Manufacturing PMI
(Times adapted to AEST timezone)
Oil saw a historic week last week, as fears over slow demand turned into storage panic as the futures contract rolled over. With continued low demand and oil being deliverable, questions over oil storage have hit the market like a sledgehammer. What came next was simply historic, oil not only plunged to zero value but also traded into the negative. This didn’t last long as buyers came back, with reports that countries took advantage of the historically low prices to rebalance reserves. Why wouldn’t you do this if a commodity like oil was trading at zero or below?
This week traders will continue to monitor price. Is the pullback nothing more than a bull trap? With storage full and demand continuing to plateau due to the hit on global growth caused by COVID-19, nothing has changed. Could these factors prolong the crash that we’ve been seeing in crude?
Gold enjoyed another week of solid buying as it’s continued to be of value in uncertainty. We did see that blip a Friday ago, but demand last week was strong as price moved back above 1730. With US stocks mainly lower after the coronavirus drug Remdesivir failed its first trial, European data reaching lows well below the figures that had been expected and the ongoing chaos in the oil markets, it was no real surprise traders jumped back into the yellow metal. This week will be looking to see if this current trend can not only hold up but continue with present influences. The April high stands at 1746.67, that would be the first test for buyers if momentum remains.
There are a few points of interest this week, with the FOMC statement and press conference. Rates are expected to stay on hold, but US unemployment claims last week saw a drop below expectations. Analysts are continuing to worry about a significant spike, could this week be the week?
Meanwhile, over at the European Central Bank, the main refinancing rate is expected to stay at zero. With last week’s shock over European business activity data, could the monetary policy statement give us some clues about forthcoming ECB stimulus or a potential rate cut?