US oil reserves data may affect markets

Yesterday’s collapse in world oil prices weakened the currencies of commodity countries, causing the US dollar index to rise. It updated the 2-week maximum. Today, the US currency is correcting downwards. No significant economic information is expected in the USA, but weekly oil reserves data will come out soon. The Australian dollar rose today thanks to preliminary data showing an 8.2% increase in retail sales in Australia in March. This is the maximum monthly growth in more than 20 years. However, it may turn out to be a one-time event, as it is caused by mass purchases of the population before quarantine. Reserve Bank of Australia forecasts a 10% drop in GDP for the first half of this year. The British pound has strengthened slightly today due to lower inflation in Britain in March to 1.5% year-on-year from 1.7% in February. The euro is being traded narrowly in anticipation of the outcome of the virtual EU finance ministers’ meeting on Thursday. They will discuss measures to support the European economy affected by the coronavirus epidemic and the amount of funds required.

On Tuesday, global stock indices dropped, as investors believe the collapse of oil prices could mean a global economic downturn. All 11 sectors of the American S&P 500 index fell. According to Refinitiv agency, the total net profit of the energy sector in the 1st quarter will fall by 58.9% compared to the previous year. Because of this, quotes of the S&P 500 energy index have fallen by 46% since the beginning of the year and it became the leader of the fall in S&P 500. Regarding forecasts for the 1st quarter, the total profit of all companies in the S&P 500 stock index is expected to decrease by 13.6%. It should be noted that quotes of this index are now below the figures of the beginning of the year by 14% or about the same amount. Thus, the drop in company profits is included in the S&P 500 value. This morning, futures on US stock indexes are being traded up. Investors responded positively to the US Senate’s decision to allocate $500 billion to help American small businesses. Another positive factor was the increase in profit of the Netflix online cinema in the 1st quarter. The demand for online entertainment and services increases due to quarantine amid Covid-19.

On Tuesday, the U.S. crude oil futures, with repayment in May, in a moment demonstrated an absurd price minus $40 per barrel. This means that the seller must pay the buyer to take the oil. However, by the time the market closed on Tuesday, US oil still rose to $ 11 per barrel. Today, oil is being traded in a narrow range, awaiting the release of the US reserves changes data for the week ended April 17. They are projected to increase by 12.9 million barrels. Recall that on April 10, S&P Global Platts agency estimated the main US oil storage occupancy rate in Cushing at 70%.

On Tuesday, gold was trying to get cheaper against the backdrop of a stronger dollar, but its downward movement was short-term. Today, gold quotes continued to grow, as investors remain fearful of the global economic crisis. Yesterday, palladium prices fell by 15%. This metal is used in the manufacture of automobile catalysts and its price is highly dependent on the state of the global economy.