US stockmarkets are around 2% lower at the start of Thursday trade on the back of some dismal economic data and Q1 earnings reports which underlined the extent of damage from the coronavirus outbreak. Stocks were led lower by Bank of America and Citigroup, who followed the lead of JP Morgan a day earlier, in reporting a slump in Q1 profits. On top of this, the March Retail Sales figure plunged by 8.7% (exp -8.0%), while all of the monthly Industrial Production, Manufacturing Output, NAHB Housing Market Index and New York State Empire Mfg Index came in at historic lows. On the brighter side, the retail sales control group – which has a larger impact on US GDP – rose by 1.7%, compared with a forecast for a 2% decline.
In the currency markets, the US$ regained some favour on the back of some safe-haven demand in a delayed reaction to the dire estimates of the impact of the pandemic on the world economy. The Aud$ got hit particularly hard as the risk-off sentiment grew through the sessiot but has bounced off its session lows, while the Euro also saw a recovery from a steep drop, amid reports that Germany plans to reopen parts of its economy as soon as Monday.
Elsewhere, Oil had another tough session, falling to as low as 19.18 pb, an 18 year low, after the EIA reported a record jump of 19.3 million barrels in crude stockpiles for last week, 65% above forecasts and brought inventory gains in US crude to nearly 50 million over the past three weeks. WTI has since managed a mild recovery, to close in NY back above 20.00, while the metals were choppy, without much direction albeit lower by 0.7% (Gold)/2%(Silver) at the end of the day.
Looking ahead, the Australian Unemployment data for March is unlikely to be positive with an increase in the headline rate to 5.5% coupled with the loss of 40K jobs and a participation rate of 65.9%. Later on, German CPI (CPI, exp 0.1%mm, 1.4%yy; HICP, exp 1.3%yy) will be focus ahead of the figure that has now taken on the main event of the week, the US initial Jobless Claims which are expected to reach 5.5 mio. Also due will be the US Housing Starts (exp 1.3 mio) and Building Permits as well as the Philadelphia Fed Mfg Survey (exp -30). Have a good day.
Economic data highlights will include:
Thur: Australian Consumer Inflation Expectation, Unemployment, German CPI, EU Industrial Production, US Building Permits, Housing Starts, Philadelphia Fed Mfg Survey, Jobless Claims
Market moves, in brief:
FX: DXY 99.57 (+0.72%)
Bonds: US10Y; 0.636% (-15.21%), German 10Y; -0.462% (-22.20%), UK 10Y; +0.303% (-9.58%), Australian 10Y; +0.923% (-0.56%), NZ 10Y; 1.012% (+4.01 %), China 10Y; 2.551% (-0.06%)
Stock Indices: DJI; -1.86%, S+P; -2.20%, NASDAQ; -1.44%, EUStoxx50; -3.75%, FTSE100; -3.34%, Shanghai Composite; -0.57%, ASX200: -2.97%
Metals: Gold $1715 oz (-0.65%), Silver $15.48 oz (-1.97%), Copper $2.30 lb (-1.29%), Iron Ore $84.22 per tonne (NYMEX) (-0.04%),
Oil: WTI $20.16 pb (-2.45%)
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