On Wednesday, bad news hit the Euro and the Aussie, together with the return of the risk aversion, the dollar once rebounded to 100.43. During the European session, the US stock index futures were just ranging, reflecting the cautious attitude of investors.
he OPEC+ meeting originally scheduled to be held on Monday was postponed to Thursday, once suppressing the oil prices. Currently, the oil prices tends to be stabilized, which the WTI crude futures is trading around $27 level. Before any news of the production cuts, it is likely that the oil market will consolidate at the current range.
On Monday opening, oil price gapped down and dropped over 10% as there is uncertainty regarding the OPEC + production cuts this week, which hurt the market sentiment. However, US stock index futures were still doing well after President Trump and Vice President Pence said that they see signs that the coronavirus outbreak in US is beginning to level off. Investor sentiment turns better, boosting the Dow futures and the S&P 500 futures both rising more than 3%.
Even if the current rise in oil prices eases some of the demand for safe havens, it is difficult to stop the dollar. In the European session on Friday, before the announcement of Non Farm Payroll, investors were quite worried. A Reuters survey of analysts showed that 100000 jobs lost in March. Dollar Index rose above 100.5 due to the uncertainty.
In the Asian session on Thursday, oil prices rebounded significantly. WTI crude oil future regained the $22 level. US stock futures are rising, which the Dow futures is up more than 400 points, reflecting a better market sentiment.
During the European session on Wednesday, the dollar rose against major currencies, mainly because the market sentiment turned gloomy. Asian stock markets were generally weak, which the Nikkei and HSI closed lower. The major European stock markets are also following the trend, with FTSE, DAX, CAC, all falling by more than 3%.
ZFX analyst Jacob Leung said that even though the financial market sentiment seems to be improving, the volatility is still quite high, causing tensions among investors. The coming data announcement this week would be highly uncertain which may be bullish for the dollar.
The global epidemic of new coronavirus was not yet under controlled. Countries have announced state of emergency, implemented measures to limit people’s activities, which is seriously disrupted the demand of energy, overwhelming global stimulus measures. The International Energy Agency (IEA) said on Thursday that due to the epidemic, 3 billion people were “blocked” in the world, and global oil demand may fall by 20%, that is 20 million barrels per day. The IEA called on Saudi Arabia of the OPEC to help on stabilizing the oil market.
The global pandemic remains severe, with a cumulative total of 720000 confirmed cases worldwide. Last week, after experiencing a three-day massive rebound, investors are turning back to watch the situation of the epidemic. It is likely that investors will be more cautious in portfolio management this week.
The cumulative number of confirmed cases of new coronavirus pneumonia in the United States surpassed China and Italy. The market is concerned about the impact of the epidemic on the U.S. economy. Furthermore, the oil market is still gloomy which affect the investment sentiment. There was profit taking pressure in US stocks after the strong rebound in recent days.