Good and Bad News this Easter Monday

April 13, 2020

Many key markets in Europe remained shut today. Canada, Australia, and Hong Kong also observed Easter Monday, while South Africa is closed for Family Day.

A big oil production cut agreement was reached Sunday involving the OPEC cartel, Norway, Russia, Mexico, Canada, Brazil and the United States. Step one will be a 9.7 million barrel per day reduction effective May 1 and running through end-2020. The price of WTI crude is 1.6% above Thursday’s closing level. The oil market had been battered by collapsing demand by industry and for travel.

The price of gold is 0.7% weaker. Sovereign debt yields are steady. The dollar shows small gains of 0.3% against the euro and yuan and 0.1% versus the kiwi, Aussie dollar, and peso but a 0.3% drop against the yen. Sterling, the loonie and the Swiss franc are unchanged in dollar terms.

Stock markets in Asia fell 2.3% in Japan, 1.9% in South Korea, 1.5% in India, and 0.5% in China, Indonesia and Taiwan.

Financial market chatter continues to express guarded confidence that macroeconomic stimulus will effectively limit the economic impact of the Covid-19 panic and hopeful that equity price lows may have already been seen from that shock.

Today will be another very difficult day for the greater New York metropolitan area, which by far has been the hardest hit U.S. locality by the pandemic. On top of problems directly caused by the coronavirus, southeastern New York is forecast to experience damaging winds today with gusts of 65 MPH or greater. A tornado cannot be ruled out from this storm. The number of worldwide reported cases of Covid-19 have risen to 1,864,666, 30% of which are in the United States. The global death count is 115,101, and about 4% of ongoing cases involve patients in critical or serious condition.

Being Easter Monday, data releases today have been limited in number and inconsequential in terms of market sensitivity.

Turkey experienced a $1.23 billion current account deficit in February, resulting in a two-month total of $2.843 billion versus a deficit of only $0.40 billion in January-February 2019.

Turkish industrial production was 7.5% greater than a year earlier in February, the smallest on-year advance in three months. Retail sales in that economy posted an on-year 10.6% increase, most in two months.

Malaysian industrial production climbed 3.2% on month and 5.8% on year in February.

Filipino consumer price inflation slipped 0.1 percentage point to a 3-month low of 1.5% in February. Portuguese CPI inflation of zero percent in March constitutes a 5-month low.

The stock of Japanese M2 money recorded on-year growth of 3.3% in March and 3.0% on average in the first quarter of 2020. That compares with 2.4% in full-2019.

Minutes from the Reserve Bank of India‘s late-March review of monetary policy underscore the replacement of inflation containment by growth support and prevention of disorderly financial markets during the Covid-19 shock. The minutes indicate that inflation prospects in any case have lessened greatly since the prior review and stress that the pandemic presents enormous uncertainties and include the possibility of great havoc to India’s economy.

U.S. markets will be open today.

Copyright 2020, Larry Greenberg. All rights reserved. No secondary distribution without express permission.


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