On Wall Street, the S&P 500 wrapped up its best week since 1974 as it climbed 12.10%. Granted, the Good Friday holiday shortened the time period. Optimism in financial markets meant the haven-linked US Dollar and similarly-behaving Japanese Yen were under pressure. This is as the growth-oriented Australian Dollar outperformed. Crude oil prices struggled to follow sentiment.
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Anti-fiat gold prices rose, particularly as the Federal Reserve revealed a US$2.3 trillion loan program which dented government bond yields. Lawmakers continued to hint at another virus relief bill with varying amounts of stimulus. These efforts and rising bets of coronavirus easing meant dismal economic data from the world’s largest economy was brushed aside by investors
Earnings season is in play with major US banks reporting in the week ahead. Meanwhile the International Monetary Fund (IMF) hosts its virtual Spring meeting alongside the World Bank. April’s Global Financial Stability Report and the World Economic Outlook will be updated. As such, further insight into the economic damage of COVID-19 will be better understood.
Focusing on economic data, first-quarter Chinese GDP is due towards the end of the week. A historical contraction is widely anticipated. United States retail sales are expected to shrink the most on record. Australian unemployment is expected to tick higher. The markets will continue weighing the harsh economic reality against valiant efforts to stabilize the fallout.
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Last week’s squabbling between Eurozone finance ministers on how best to mitigate the economic impact of the coronavirus pandemic has weakened the long-term outlook for the Euro.
The Australian Dollar has picked up strongly from its March lows but may not be able to maintain altitude this week.
Dow Jones risk rally at risk of fading. Eyes on Chinese GDP with sharp deceleration expected.
The Mexican Peso may face aggressive selling pressure ahead of key US employment data, growing coronavirus cases and the IMF’s outlook on financial stability and the global economy.
Gold prices managed a spirited recovery from 2020 lows as the Fed leaned in to keep shaky credit markets from triggering a credit crisis. That may not keep liquidation pressure at bay.
This week, USD/JPY bulls shied away from rallying the price further. Will the next week be any different?
USD/CAD has been weakening towards an important level of support; the next few days may go a ways towards determining a larger directional move.
Markets have more than stabilized with rallies so far looking healthy, but they do appear to be far from being out of the woods just yet.
EUR/USD may face range bound conditions through the Easter holiday as the exchange rate fails to extend the series of lower highs and lows from the previous week.
Gold prices marked a third consecutive weekly advance with the rally now testing uptrend resistance. Here are the levels that matter on the XAU/USD technical chart.
Crude oil’s recent price action has trimmed some of this year’s substantial losses and the technical set-up suggests that this rally may have further to run.
The US Dollar continues to coil after a riveting month of March. Risk aversion themes remain but the Fed has opened the liquidity pump – which force will take over?