Week Ahead: Virus and Oil
In a week which will be shorter due to Easter Friday, the focus again will be on Covid 19. The main territory affected by the disease has now switched from Europe to the United States. More than 1/4 of total cases are now in the US. Last week we saw that the effect of the virus on the US economy is significant with US jobless claims hitting a weekly record of 6,648k. We also had non-farm payrolls for March coming in at -701k vs. the expected -100k. This week the calendar will be a little quieter in terms of US data - we have the Fed Meeting Minutes being released on Wednesday. Then on Thursday it's time for another Initial Jobless Claims data with estimates of 5000k.
Elsewhere, in Europe we will see the ECB minutes on Thursday. Also something to potentially keep an eye on is the progression of Covid 19 there. Some of the news in terms of new cases and deaths in Italy and Spain are showing a slowing in these metrics, and hope that maybe the worst is behind.
The Royal Bank of Australia has its interest rate decision this week as well. Estimates are for rates to be kept at 0.25%, and we shall see whether or not a potential surprise interest rate cut to 0 might come in.
There is also the Canada Employment Change for March coming in on Thursday with estimates of -350k. We shall see if the Canadian economy follows in the footsteps of the US and posts bigger than expected job losses.
And here comes the UK - GDP and Manufacturing production data coming in on Thursday. Thus so far we can see that potentially the busiest day of the week for traders will be Thursday with a lot of top tier data to make sense of.
Last but not least - we have to talk about Oil. Last week the market had a weak start with WTI trading below 20$ per barrel a few times. This was the case until US President Donald Trump decided to post a tweet and to talk about potential supply cuts. After this the market rallied and on Friday WTI futures closed around the 30$ per barrel mark. A virtual meeting of OPEC+ was scheduled to take place on Monday, but it has now been postponed for Thursday. This could be the one to watch this week, as traders will be waiting to see whether this meeting between Saudi Arabia and Russia, which was brokered by Trump, will result in these cuts. If the cut doesn't materialise, we could potentially see oil heading down towards the lows of last week. If the cut is anything less than the 10million barrels which Trump mentioned, the market could see some potential downside. If we see the cut happen, or if it's bigger than expected, we could see some potential further upside in Oil prices.
Friday is Good Friday and a lot of markets will be closed. To all of you who are celebrating, we from Market Insides wish you a Happy Easter and stay safe during these tough times.