Oil prices plummet
Markets turn their attention to oil prices as the lockdown caused by the coronavirus has wrecked demand.
The EURUSD opened the week at $1.08652 and slid early, before a quick dip mid-session saw the euro fall to lows of $1.08403. The euro bounced off those lows and climbed to a high of $1.08963 just a few hours later. It quickly came off those highs and retreated back towards its opening price during late trading. It is now sitting at $1.08512. The GBPUSD weakened overnight after opening at $1.24921. The pound edged up to a high of $1.24986 in the opening hour of the day before falling to lows of $1.24154 mid-session. A brief rally was not enough to stave off the losses sustained earlier in the day as the pound struggles to stay above $1.24. It is now trading at $1.24196.
The Dow got off to a negative start this week after opening Monday at 24,179.34. The index crept up to a high of 24,318.82 early in the day and remained steady for a few hours before the losses kicked in. A short-term reversal of fortune late in the day was not enough for hold the Dow up as it fell to lows of 23,554.07. It has come off those lows and is now trading at 23,665.50. The Dax started the week positively but ultimately suffered the same fate as other major indices. The German index began the week at 10,648.01 and climbed to a high of 10,770.68 early. The rot set in shortly afterwards, with the Dax sinking to a low of 10,435.25. A late rally saw the Dax regain a large chunk of those gains but fell away again. It is now trading at 10,531.35.
Markets are keeping a keen eye on oil prices as they continue to plummet. Futures contracts on WTI were in negative territory, such is the lack of demand and huge oversupply of the commodity. Production cuts are doing very little to stem the tide as countries are quickly filling up oil storage facilities due to country-wide lockdowns in many countries. While prices continue to be slashed, how long before oil production loses its financial viability, at least in the short term? Oil is already at multi-decade lows but the cost to extract, transport and store that oil has not changed.
Data published today includes:
US – Existing Home Sales
Canada – Retail & Core Retail Sales
Australia – CB Leading Index, RBA Governor Philip Lowe speaks
Europe – European & German ZEW Economic Sentiment, Swiss Trade Balance
UK – Claimant Count Change, Average Earnings Index, Unemployment Rate
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