GLOBAL NEWS:
The dollar edged higher against the currencies of oil producers on Thursday as a rebound in crude prices from an unprecedented collapse only partially calmed markets unnerved by the massive coronavirus-led drop in global demand. The euro held steady against the greenback and the pound ahead a of meeting of European Union officials on the bloc’s response to the economic turmoil caused by the global coronavirus pandemic. It may take EU countries until the summer or even longer to agree on how exactly to finance aid to help economies recover as major disagreements persist, a bloc official said on Wednesday. Analysts say sentiment is still supportive of the U.S. currency because the coronavirus outbreak is driving a global depression, which will encourage investors to opt for the safety of holding their funds in dollars. The U.S. dollar edged up against the Canadian dollar to C$1.4182 following a 0.3% decline on Wednesday. The greenback rose slightly to 24.5120 Mexican pesos, sitting close to a two-week high. Against the Norwegian crown, the U.S. currency held steady at 10.8012, near a one-month high reached on Wednesday. U.S. West Texas Intermediate (WTI) futures CLc1 rose 2.1% to $14.07 a barrel in Asian trading on Thursday. On Monday front-month WTI futures plunged to a historic low to around minus $40 as a glut of oil and dwindling capacity to store it sent oil prices into a tail spin. These gains pale against persistent investor concerns about the collapse in demand for oil, as major economies have been brought to a virtual standstill with stay-at-home rules and severe restrictions on businesses and travel aimed at limiting the spread of the coronavirus. Ahead of the outcome of the meeting, the euro edged lower to $1.0810. Against the pound, the common currency was little changed at 87.72 pence. The European Central Bank has agreed to accept junk bonds as collateral to allow banks to finance themselves at the ECB, which should be a positive factor for the euro, but investors are waiting for details on the fiscal response. The dollar was little changed versus the yen as the pair remains stuck in a holding pattern.
Asian stock markets rose on Thursday as the combination of a rebound in crude prices from historic lows and the promise of more U.S. government aid to cushion the coronavirus-ravaged economy helped calm nervous markets. Better-than-expected U.S. corporate earnings also lifted equities, analysts said, though overall sentiment remained fragile as the pandemic cut a destructive path through the world economy. MSCI’s broadest index of Asia Pacific shares outside of Japan bounced from two-week lows to be up 0.5% at 460.43 points. Australian S&P/ASX added 0.4%, Chinese shares opened firm with the blue-chip index up 0.3%. Japan’s Nikkei climbed 0.8%. The gains followed a strong overnight lead from Wall Street with the Dow up 2%, S&P 500 adding 2.3% and Nasdaq rising 2.8%. All 11 S&P 500 sector indexes climbed as the U.S. Senate unanimously approved the new relief package, adding to trillions of dollars in stimulus that has helped Wall Street rebound from its March lows. Stock markets may have bottomed out after the impressive bounce since a rout last month, analysts said. In Europe, traders were buoyed after Italy breezed through a major debt sale on Tuesday and speculation continued that the European Central Bank would provide more support measures. Brent oil extended gains on Thursday to rise more than 3% to $21.09 a barrel on the prospects for further production cuts to reduce the glut in the oil market, sending the S&P 500 energy index up 3.6%. U.S. crude was up 3.3% at $14.22. U.S. crude futures fell deep into negative territory on Monday as the market grappled with a supply glut and cratering demand.
Australia’s goods exports rose sharply in March as the resource-rich country shipped more iron ore to China and more gold to Hong Kong and the UK, preliminary data on Thursday showed. The Australian Bureau of Statistics said exports of goods jumped 29% in original terms in March to A$36.1 billion, following declines in January and February. Exports of non-rural goods rose A$4.8 billion, or 20%, with a notable increase in iron ore shipments to China, while exports of non-monetary gold climbed by A$2.5 billion, or 225%. Imports of goods rose by 10% to A$23.8 billion, with capital goods up 18% and intermediate goods rising 6%. Within that, imports of machinery and transport equipment jumped 23%.
Indian shares rose on Thursday, tracking gains across global markets, as oil prices recovered from a collapse earlier in the week, while hopes of a new stimulus package to mitigate the hit from the coronavirus outbreak lifted sentiment. The NSE Nifty 50 index rose 0.75% to 9,256.4 by 0421 GMT, while the benchmark S&P BSE Sensex was up 0.59% at 31,566.96. Energy and financial stocks led the gains in Mumbai, with conglomerate Reliance Industries Ltd rising for a second straight day, up about 1%. Private-sector lenders ICICI Bank Ltd and Kotak Mahindra Bank Ltd gained 2.7% each. Asian markets climbed after Wall Street ended higher as oil prices rebounded and the U.S. Senate approved nearly $500 billion more in aid to help small businesses weather the health crisis. Hopes of new measures to jump start growth buoyed domestic market sentiment, even as a senior minister said after a cabinet meeting on Wednesday that a package would be announced as and when it is designed. While U.S. and European governments have spent trillions of dollars to offset the economic impact of the crisis, India has so far announced only one round of budget stimulus worth about $23 billion to provide free cooking gas cylinders, grains and some cash to the country’s poor. Britannia Industries Ltd was among the top boosts to the Nifty, up nearly 10%, ahead of its quarterly results later in the day.
Gold eased on Thursday as investors booked profits from a near 2% rally in the previous session, while U.S. stimulus measures to ease the economic blow from the coronavirus outbreak limited losses and kept prices above $1,700 an ounce. Spot gold slipped 0.3% to $1,707.76 per ounce by 0305 GMT, after gaining as much as 1.9% in the previous session. U.S. gold futures fell 0.3% to $1,733.40 per ounce. The market is probably more inclined to take profit on gold, simply because they are nearing the highs of the recent range. Against key rivals, the dollar climbed to a more than two-week peak earlier in the session, making gold costlier for investors using other currencies. Asian stock markets rose on Thursday as the combination of a rebound in crude prices from historic lows and the promise of more U.S. government aid to cushion the coronavirus-ravaged economy helped calm nervous markets. The pandemic has prompted governments and central banks around the world to unleash unprecedented fiscal and monetary support for economies. Gold tends to benefit from widespread stimulus measures from central banks since it is seen as a hedge against inflation and currency debasement. SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, holdings rose 0.9% to 1,042.46 tonnes on Wednesday.
Oil extended gains on Thursday amid signs that producers are cutting production to cope with a collapse in demand for fuel as the coronavirus outbreak ravages the world’s economies. Brent crude LCOc1 was up 33 cents, or 1.6%, at $20.70 a barrel by 0254 GMT after rising more than 5% on Wednesday. U.S. West Texas Intermediate futures were up 28 cents, or more than 2%, at $14.06 a barrel, having risen around a fifth in the previous session. U.S. crude futures fell to below minus $40 on Monday on concerns that buyers were running out of storage space to take deliveries. In the United States, the world’s biggest oil producer, Oklahoma’s energy regulator said companies could shut wells without losing their leases, an initial victory for struggling U.S. producers seeking relief from the market crash after a surge in production. The state is the fourth-largest oil producer in the U.S. As oil consumption collapses, the Organization of the Petroleum Exporting Countries, Russia and other producers, a group known as OPEC+, are set to cut supply by a record 9.7 million barrels per day from May 1. Those cuts may have to be extended to match the shortfall in demand, analysts said. Loadings of Russia’s Urals crude grade from the Baltic Sea in the first 10 days of May are set to be 36% lower than the same period in April, indicating the country is complying with the cuts. U.S. stockpiles of crude, gasoline and distillate fuels rose last week as inventory are building around the world, the Energy Information Administration said on Wednesday. Crude inventories rose by 15 million barrels in the week to April 17 to 518.6 million barrels, near a record of 535 million barrels set in 2017. In Japan, the world’s third-biggest economy, data released on Thursday showed services shrank at the most on record while manufacturers also shut down operations.