CFD Markets News and Forecasts — 05-05-2020

FXStreet reports that analysts at TD Securities think Brexit risks will soon become a tradeable theme for sterling again.

“We do not think there is sufficient risk premium priced into GBP at the moment; much of the rise in the UK daily news index, for instance, has occurred over the acute phase of the pandemic.” 

“While cable put premiums have richened, there remains an appreciable disconnect by this measure of uncertainty that has approached Brexit referendum levels. There is plenty of room for Brexit risk premia to build into the sterling price.”

“We view GBP/USD rallies toward 1.25 should be faded. We remain short cable and target a move to 1.18 in the coming weeks.”

Says that China should have informed us about the coronavirus

Adds that he has not talked to China's president Xi

U.S. will be reporting very definitely over a period of time about origin virus

says the estimate of 3000 deaths a day from COVID-19 by June 1 assumes no mitigation

Virus models have been very inaccurate

U.S. infectious disease expert Fauci will testify before Senate panel

The Institute for Supply Management (ISM) reported on Tuesday its non-manufacturing index (NMI) came in at 41.8 in April, which was 10.7 percentage points lower than the March reading of 52.2 percent. The April reading pointed to the first contraction in the services sector since December 2009 and the steepest decline since March 2009.

A reading above 50 signals expansion, while a reading below 50 indicates contraction.

Of the 18 manufacturing industries, 16 reported decreases last month, the ISM said, adding that respondents were concerned about the continuing coronavirus impacts on the supply chain, operational capacity, human resources and finances, as well as the uncertain timelines for the resumption of business and a return to normality.

According to the report, the ISM's non-manufacturing business activity measure fell to its record low of 26 percent, 22 percentage points lower than the March reading. The new orders gauge came in at 39.2 percent, 20 percentage points below February's reading. The Employment Index fell by 17 percentage points to 30 percent from the February reading. The Prices Index of 50 percent was 0.8 percentage point lower than the February reading of 50.8 percent, indicating that prices were unchanged in March. Meanwhile, the Supplier Deliveries Index registered an all-time high of 78.3 percent, up 16.2 percentage points from the March reading, limiting the drop in the composite NMI

Commenting on the data, the Chair of the ISM Non-Manufacturing Business Survey Committee, Anthony Nieves, noted, "The past relationship between the NMI and the overall economy indicates that the NMI for April (41.8 percent) corresponds to a 2.3-percent decrease in real gross domestic product (GDP) on an annualized basis."

The latest report by IHS Markit revealed on Tuesday the seasonally adjusted final IHS Markit U.S. Services Business Activity Index (PMI) stood at 26.7 in April, sharply down from 39.8 in March and fractionally lower than the previously published "flash" figure of 27.0. The latest reading pointed to steepest fall in business activity across the U.S. service sector on record.

Economists had forecast the index to stay unrevised at 27.0.

According to the report, business activity fell noticeably as client demand slumped and many businesses closed temporarily as the COVID-19 outbreak escalated and emergency public health measures intensified. New business contracted at the most severe rate since the series began in October 2009 and the fall in employment was the most marked in the series history and largely stemmed from excess capacity at service providers.

• It will be designed to ensure safe return to work
• What matters is that we get any change in social distance right, fully consider the evidence and ensure we communicate the next steps in a clear way

U.S. stock-index futures rose on Tuesday, as oil prices demonstrated recovery and major economies around the world began reopening.

Global Stocks:

FXStreet reports that analysts at Credit Suisse apprise that the S&P 500 has again managed to hold support on a closing basis from its rising 13-day average, currently seen at 2831.

"Near-term, we see scope for a rebound to test resistance from the price gap seen Friday, seen starting at 2869 and stretching up to 2912."

"With the 63-day average also in this zone at 2874 and with the rally having essentially been capped as expected at the 61.8% retracement of the Q1 collapse at 2934, we continue to look for this to cap to add weight to our topping scenario."

"A close below the aforementioned 13-day average at 2831 is needed to add weight to this view with support then seen next at 2798, then 2776/75 - the 23.6% retracement of the entire March/April recovery. At the end of the day though, below 2733/27 remains needed to mark a more important top."

(company / ticker / price / change ($/%) / volume)

Statistics Canada announced on Tuesday that Canada's merchandise trade deficit stood at CAD1.41 billion in March, narrowing from a revised CAD0.89 billion gap in February (originally a CAD0.98-billion gap).

Economists had expected a deficit of CAD2.00 billion.

According to the report, the country's both imports and exports decreased notably, as the impact of measures to contain the spread of COVID-19 in Canada became evident. Its exports fell 4.7 percent m-o-m to $46.3 billion in March, the lowest level since January 2018, driven by lower exports of aircraft and other transportation equipment and parts (-24.8 percent m-o-m), motor vehicles and parts (-14.4 percent m-o-m) and energy products (-7.4 percent m-o-m). Meanwhile, imports decreased 3.5 percent m-o-m to $47.7 billion in March, a level not observed since October 2017, led by declines in imports of aircraft and other transportation equipment and parts (-17.1 percent m-o-m), motor vehicles and parts (-13.1 percent m-o-m), and electronic and electrical equipment and parts (-3.5 percent m-o-m).

In the first quarter of 2020, exports decreased 3.0 percent, a third consecutive quarterly decline, imports fell 2.0 percent, following a 2.0 percent drop in the last quarter of 2019.

The U.S. Commerce Department reported on Tuesday that U.S. the goods and services trade deficit widened to $44.4 billion in March from a revised $39.8 billion in the previous month (originally a gap of $39.9 billion).

Economists had expected a deficit of $44.0 billion.

According to the report, the March advance in the goods and services deficit reflected an increase in the goods deficit of $4.6 billion to $65.6 billion and a decline in the services surplus of $0.1 billion to $21.2 billion.

Exports of goods and services from the U.S. fell 9.6 percent m-o-m to $187.7 billion in March, while imports dropped 6.2 percent m-o-m to $232.2 billion, in part, due to the impact of COVID-19, as many businesses were operating at limited capacity or ceased operations completely, and the movement of travelers across borders was restricted.

Year-to-date, the goods and services deficit tumbled 17.8 percent from the same period in 2019. Exports decreased 3.5 percent, while imports dropped 6.4 percent.

Fiat Chrysler (FCAU) reported Q1 FY 2020 loss of EUR0.30 per share (versus earnings of EUR0.36 per share in Q1 FY 2019), worse than analysts' consensus estimate of earnings of EUR0.05 per share.

The company's quarterly revenues amounted to EUR20.567 bln (-16.0% y/y), missing analysts' consensus estimate of EUR21.121 bln.

FCAU rose to $8.37 (+0.84%) in pre-market trading.

GBP rose against most other major currencies in the European session on Tuesday as risk sentiment improved slightly amid reports that major economies around the world had begun reopening.

Italy, one of the hardest hit by coronavirus countries, allowed 4.5 million citizens to get back to work on Monday after nearly two months at home, while Spain unveiled a plan for a progressive re-start of the economy. Similar, but more cautious, moves had been announced in France, Germany, the UK, and many other countries. In the U.S., most states are preparing to reopen by the end of this week.

In addition, a senior Trump administration official signaled that the United States was not looking to punish Beijing economically over the coronavirus, contradicting the U.S. president's threats to impose tariffs on China as punishment for the pandemic. Deputy national security adviser Matthew Pottinger said on Monday the U.S. was not considering "punitive measures" against China over its handling of the coronavirus pandemic.

However, the further growth of the pound was limited by the latest economic reports. IHS Markit's report revealed a sharp contraction in the UK service sector in April due to coronavirus lockdown measures. According to the report, IHS Markit/CIPS UK Services PMI Business Activity Index fell to 13.4 in April from 34.5 in March, pointing to the steepest contraction in the sector since the start of the survey in July 1996. The earlier "flash" reading for April was 12.3. Meanwhile, the data published by the Society of Motor Manufacturers and Traders (SMMT) revealed that car registrations in the UK plunged 97.3 percent y/y to 4,321 units in April. That was the lowest level since February 1946, just a few months after the end of World War II.

Market participants are also awaiting the outcomes of the Bank of England's (BoE) meeting on Thursday, which could provide more catalysts for movement in GBP.

FXStreet reports that Lee Sue Ann, an economist at UOB Group, suggests that the Bank of England (BoE) could still loosen its monetary conditions further.

“The BoE had cut rates by 65 bps to 0.10%, which is its view of the lower bound, and increased its asset purchase target to GBP645bn. Estimates suggest that the BoE still has plenty of space to expand its current QE program. There are GBP390bn of gilts currently available to buy and that is before the enormous issuance due this year. As such, the sluggish economic backdrop would put the prospect of more BoE easing on the table.”

FXStreet reports that according to Liz Ann Sonders from Charles Schwab, the ‘dumb money’ and the ‘smart money’ are beginning to converge and would represent a risk if they continue to reach opposite extremes again. 

“The stock market’s rally has been fueled by Fed-provided liquidity, but the 62% retracement between March 23 and April 29 suggests stocks were pricing in a V-shaped recovery in the economy. That is unlikely.”

“In contrast to the more bullish outlook being expressed by the ‘dumb money’ and the still fairly bullish positioning of the ‘smart money,’ investor sentiment in opinion surveys is significantly more subdued.”

“From an investor perspective, unlike consumer confidence vs. consumer spending, investors are saying they’re more bearish, but acting more bullish.”

“The percentage of S&P 500 stocks trading above their 200-day moving average remains extremely low at only 20%. That is significantly lower than 70-80% at this point last year (when the S&P was at about the same level as today).”

• Adds that the European top court rulings are binding for all national courts

FXStreet reports that according to analysts at Credit Suisse, resistance at 107.50 ideally caps for weakness back to 106.45/35, then 105.20/14.

“With a bearish continuation pattern in place below 106.92, we thus stay bearish and look for a retest of 106.45/35 – last week’s low and the 50% retracement of the March rally. Beneath here in due course should see support next at 105.77, then the 61.8% retracement of the March rally and price support at 105.20/14.” 

“Near-term resistance remains at 107.08/17 ideally caps to keep the immediate risk lower. Above 107.50 though remains needed to raise the prospect of a more neutral trend and strength to 108.04/08.”

FXStreet reports that  analysts at Nordea note that the German Constitutional Court did not reject the ECB’s bond purchases directly but gave the ECB 3 months to provide more clarifications, or the Bundesbank is out.

“The GCC ruled today that it was not ascertainable that the PSPP violates the constitutional identity of the Basic Law in general or the overall budgetary responsibility of the German Bundestag in particular.”

“The GCC gave the ECB three months to adopt a new decision that demonstrates in a comprehensible and substantiated manner that the monetary policy objectives pursued by the PSPP are not disproportionate to the economic and fiscal policy effects resulting from the programme.”

“Today’s ruling should increase uncertainty regarding the future to such an extent as to be negative for EUR assets in general. Italian bond spreads should see further widening pressure and the euro face pressure.”

“Today’s ruling also further illustrates the limits of the ECB’s interventions and adds pressure on the Euro-area governments to implement further measures on the fiscal side to tackle the corona crisis.”

• Unless there is significant progress in Brexit talks, we will reach another crisis point
  
  

DuPont (DD) reported Q1 FY 2020 earnings of $0.84 per share, beating analysts' consensus estimate of $0.77 per share.

The company's quarterly revenues amounted to $5.221 bln (-3.6% y/y), beating analysts' consensus estimate of $5.143 bln.

DD rose to $45.15 (+0.96%) in pre-market trading.

American Intl (AIG) reported Q1 FY 2020 earnings of $0.11 per share (versus $1.58 per share in Q1 FY 2019), missing analysts' consensus estimate of $0.82 per share.

The company withdrew its previously issued guidance as the COVID-19 crisis had created significant uncertainty, and it would take time to understand its broader ramifications.

AIG closed Monday's trading session at $24.07 (+0.71%).

CNBC reports that according to Australian bank ANZ, among Asian economies, corporate debt is building up the fastest and the most in China, South Korea and Singapore.

Companies in those countries had already been rapidly chalking up debt in the past few years, said the report by ANZ Research. But the coronavirus situation has hurt revenues and in turn, affected their ability to service their debts.

"The magnitude and speed of debt accumulation is the highest in China, Singapore, and South Korea," the report said. "Owing to both the intensity of the COVID-19 pandemic as well as the various government measures that have followed, corporate revenues in several industries have been impacted ... If this situation continues, it can result in credit rating downgrades and defaults and drag economic growth lower."

Companies in the energy sector are particularly hard-hit in Singapore and South Korea, while in China, real estate companies are stretched, according to the report.

FXStreet reports that UBS analysts painted a rosier picture for oil prices next year, in the wake of a pick-up in oil demand, as the coronavirus-hit major economies ease lockdown and travel restrictions.

"We therefore expect the oil market to be balanced in third quarter and undersupplied in fourth quarter, and Brent to recover to $43 per barrel by end-2020 and to $55 per barrel by mid-2021.

We still expect oil demand to contract strongly this quarter, though not as much as we did before; we now estimate minus 15 million barrels per day (mbpd) year on year for 2Q, versus minus 20 mbpd previously.

Global oil supply to contract by nearly 6 mbpd year on year in the second quarter, citing forced production shut-ins in North and South America.

Oil demand will likely continue recovering in the second half of this year, adding that consumer changes due to the virus may prevent a quick recovery to pre-crisis demand levels.

On the supply side, with the staggered production cuts winding down, the second half of 2020 will likely start with OPEC ramping up production by 2 mbpd.

Non-OPEC oil production, however, is likely get hit hard by low prices, causing production to be shut in as well in 2H20.

End-of-quarter price forecasts for Brent are $32 per barrel for 3Q20 and $43, $50 and $55 a barrel for the following three quarters."

According to the report from Eurostat, in March 2020, the month when COVID-19 containment measures began to be widely introduced by Member States, industrial producer prices fell by 1.5% in the euro area and by 1.4% in the EU, compared with February 2020. In February 2020, prices decreased by 0.7% in both the euro area and the EU.

In March 2020, compared with March 2019, industrial producer prices decreased by 2.8% in the euro area and by 2.5% in the EU.

Industrial producer prices in the euro area in March 2020, compared with February 2020, decreased by 5.5% in the energy sector and by 0.5% for intermediate goods, remained stable for capital goods and for non-durable consumer goods, while prices rose by 0.1% for durable consumer goods. Prices in total industry excluding energy fell by 0.2%. In the EU, industrial producer prices decreased by 5.5% in the energy sector and by 0.4% for intermediate goods, remained stable for capital goods, while prices rose by 0.1% for durable and non durable consumer goods. Prices in total industry excluding energy fell by 0.1%.

The largest decreases in industrial producer prices were observed in Greece (-5.3%), Lithuania (-5.1%) and Spain (-3.0%), while the only increases were recorded in Cyprus (+0.5%), Latvia and Malta (both +0.2%).

According to the report from IHS Markit, April data indicated a reduction in UK service sector activity on an unprecedented scale since the start of the survey in July 1996, reflecting emergency public health measures to stem the coronavirus disease 2019 (COVID-19) pandemic.

The headline seasonally adjusted UK Services PMI registered 13.4 in April, down sharply from 34.5 in March, to signal a rapid decline in UK service sector output. The earlier 'flash' reading for April was 12.3. Prior to the last two months, the survey-record low stood at 40.1 in November 2008.

Around 79% of survey respondents reported a drop in business activity during April, which was almost double the survey-record set in March (43%). Reduced volumes of activity in April were of course overwhelmingly attributed to either business closures, shutdowns among clients or shrinking sales due to a slump in non-essential spending. Close to one-in-seven survey respondents (14%) commented on unchanged business activity since March, which was often viewed as a successful outcome after enacting business continuity plans and home working.

Mirroring the trend seen for business activity, latest data signalled survey-record declines in new work, backlogs and employment across the service economy. The small minority of firms reporting growth in new business during April mainly attributed it to online consumer spending, public sector contract awards and demand for services related to remote working. Adding to downward pressure on sales volumes, new business from abroad slumped in April, with transport, tourism and leisure companies often commenting on cancellations of all overseas bookings. Service sector firms also noted that international travel restrictions and business closures led to stoppages on new projects with clients in Europe, the US and Middle East.

• The judges reach a 7-1 ruling in the ECB QE case

• German judges in ECB case say some actions are unconstitutional

• German top court says ECB's bond purchase scheme partially violates constitution

• German top court says some ECB action held illegal, not valid in Germany

• ECB decisions are not backed by EU treaty

• Germany is in a severe economic recession

• Economy can recovery sustainably once the pandemic has been overcome

• Should not lose sight of eventual exit from stimulus measures

According to the report from Society of Motor Manufacturers and Traders (SMMT), UK new car registrations declined -97.3% in April. This marked a record low for the new car market as the coronavirus pandemic forced the nation into lockdown for the entire month, with showrooms closed and car buyers housebound.1

Just 4,321 new cars were registered in the month, some 156,743 fewer than in April 2019, with many delivered to key workers and front line public services and companies. The decline was the steepest of modern times, and is in line with similar falls across Europe, with France -88.8% down and the Italian market falling -97.5% in April.

Fleet orders represented by far the bulk of the market, taking 71.5% market share, equivalent to 3,090 units, while private buyers registered just 871 cars - a year on year fall of -98.7%. The distortion was reflected across all segments and fuel types, with the numbers of new petrol and diesel cars joining UK roads down -98.5% and -97.6% respectively, as plug-in hybrid vehicles (PHEVs) declined -95.1% and hybrids (HEVs) -99.3%. Meanwhile, the niche battery electric vehicles sector saw a smaller percentage decrease of -9.7%, as some pre-ordered deliveries of the latest premium models were able to be fulfilled.

Mike Hawes, SMMT Chief Executive, said: "With the UK's showrooms closed for the whole of April, the market's worst performance in living memory is hardly surprising. These figures, however, still make for exceptionally grim reading, not least for the hundreds of thousands of people whose livelihoods depend on the sector. A strong new car market supports a healthy economy and as Britain starts to plan for recovery, we need car retail to be in the vanguard. Safely restarting this most critical sector and revitalising what will, inevitably, be subdued demand will be key to unlocking manufacturing and accelerating the UK's economic regeneration".

FXStreet reports that economists at Rabobank expect the Monetary Policy Committee to keep its policy settings unchanged at this week's meeting.

"We expect that the BoE's MPC will keep the benchmark interest rate unchanged at 0.10% at this week's meeting. The path towards a negative policy rate hasn't opened up yet, and the OIS forward curve is almost completely flat."

"Even as there are no expectations for policy changes going into this meeting, the MPC's outlook will gather a lot of interest. We will see the first set of official forecasts that incorporates the impact of the Covid-19 pandemic."

"While we think that the BoE will eventually have to increase the size of its Asset Purchase Facility again, we only expect such a decision at the June meeting."

CNBC reports that rising tensions between the U.S. and China - made worse by the coronavirus pandemic - is the start of a new Cold War, former top White House trade negotiator Clete Willems said.

"The reality is that tensions between the United States and China are rising considerably at the moment," Willems, a former deputy director of the National Economic Council, told CNBC.

"I know people get uncomfortable with the terminology, but I do think we have to be honest and call this what it is and this is the start of a new Cold War and if we're not careful, things could get much, much worse," he added.

Among the latest disputes between Washington and Beijing is the origin of the coronavirus, which has infected more than 3 million people and killed over 250,000 across 187 countries and territories, according to data compiled by Johns Hopkins University.

The virus first emerged in the Chinese city of Wuhan before spreading worldwide - and there's been growing outrage globally over how China handled its outbreak.

In the U.S., critics allege Beijing wasn't upfront about the dangers of the virus, was too slow to respond and under-reported the extent of the outbreak within its borders.

FXStreet reports that FX Strategists at UOB Group believe NZD/USD could slip back and re-test the 0.5920 region in the next week.

24-hour view: "Yesterday, we held the view that NZD 'could dip below 0.6000 but may not be able to hold below this level'. However, the 0.6000 level was unthreatened as NZD rebounded from 0.6010. Downward momentum has dissipated and this coupled with still oversold conditions suggests there is room for the current rebound to extend higher. That said, any advance is expected to face solid resistance at 0.6090 (the next resistance at 0.6120 is not expected to come into the picture). Support is at 0.6040 and the 0.6010 low is acting as a very strong support for today."

Next 1-3 weeks: "In our latest update from last Thursday (30 Apr, spot at 0.6120), we held the view that NZD 'is likely to advance to 0.6180'. NZD subsequent rose to 0.6176 before staging a surprising sharp and rapid pullback. Upward momentum has eased and the 0.6176 high is likely a short-term top. From here, the pullback in NZD could edge lower to 0.5920. At this stage, the prospect for a sustained decline below this level is not high. On the upside, only a move above 0.6120 would indicate the current downward pressure has eased."

The US dollar was almost unchanged against the euro and japanese yen on Tuesday, the australian dollar rose after the results of the Reserve Bank of Australia meeting.

As expected, the Reserve Bank of Australia did not change the key parameters of monetary policy at the end of the meeting on Tuesday. The RBA kept the key interest rate at a record low of 0.25% per annum, and the target yield of three-year government bonds at 0.25%. The Australian Central Bank expects the country's GDP to fall by about 10% in the first half of 2020 and by about 6% for the entire year. At the same time, the economy is likely to grow by 6% next year.

Traders continue to fear the growing contradictions between the US and China. These fears were provoked yesterday by information that Washington is considering raising duties on Chinese goods as one of the measures to hold Beijing accountable for late informing the world public about the appearance of the COVID-19 coronavirus infection.

The ICE Dollar index, which shows the value of the us dollar against six major world currencies, fell by 0.08% compared to the previous day.

Reuters reports that according to survey, a substantial majority of people around the world want their governments to prioritise saving lives over moves to restart economies being hammered by measures aimed at halting the spread of the new coronavirus.

The latest findings of the "Edelman Trust Barometer," which for two decades has polled tens of thousands of people on their trust in core institutions, challenge the notion that "lockdown fatigue" is rising among populations hit by the pandemic.

Overall, 67% of the 13,200-plus people interviewed between April 15 and April 23 agreed with the statement: "The government's highest priority should be saving as many lives as possible even if it means the economy will recover more slowly."

Just one-third backed the assertion: "It is becoming more important for the government to save jobs and restart the economy than to take every precaution to keep people safe."

The study, produced by U.S. communications company Edelman, was based on fieldwork carried out in Canada, China, France, Germany, India, Japan, Mexico, Saudi Arabia, South Korea, the United Kingdom and the United States.

Authorities in New Zealand and Vietnam have been praised for early moves to halt the spread with social distancing measures while governments in the United States, UK, Japan, Russia and elsewhere have faced criticism for a lack of preparedness.

According to the report from Federal Statistical Office, the consumer price index (CPI) fell by 0.4% in April 2020 compared with the previous month, reaching 101.3 points (December 2015 = 100). Inflation was -1.1% compared with the same month of the previous year.

The 0.4% decrease compared with the previous month can be explained by several factors including falling prices for air transport. Hotel accommodation also recorded a price decrease, as did petroleum products. In contrast, prices for vegetables and clothing increased.

In April 2020, the Swiss Harmonised Index of Consumer Prices (HICP) stood at 100.87 points (base 2015 = 100). This corresponds to a rate of change of +0.1% compared with the previous month and of -1.0% compared with the same month the previous year. Due to the effects of the pandemic, the same missing price imputation techniques used for the CPI were introduced for the HICP.

FXStreet reports that FX Strategists at UOB Group noted EUR/USD could still edge higher to the 1.1070 region in the next weeks.

24-hour view: "After soaring to a high of 1.1017 last Friday, the rapid and sharp retreat in EUR yesterday was not expected. The swift pullback appears to be running ahead of itself and while EUR could edge lower from here, it is unlikely to threaten the strong support at 1.0870. Resistance is at 1.0935 followed by 1.0960."

Next 1-3 weeks: "While EUR traded on a firm note late last week, it gave up a large part of its gains as it slipped by -0.70% (NY close of 1.0906). The pullback has dented the upward momentum but for now, we are holding on to our view from yesterday (04 May, spot at 1.0955). As highlighted, the rapid rise from late last week appears to have room to test the 1.1070 level. However, a break of 1.0870 (no change in 'strong support' level) would indicate that EUR is not ready to move higher just yet. Meanwhile, in order to rejuvenate the current flagging momentum, EUR has to move and stay above 1.0960 within these 1 to 2 days or a breach of the 'strong support' would not be surprising."

According to the report from SECO, consumer sentiment in Switzerland is at a historic low. The coronavirus is dampening expectations regarding general economic development and unemployment. Respondents are also getting ready for tough times in terms of their own financial situation.

Swiss consumer sentiment has fallen from −9 points in January to −39 points. This is well below the level seen in the 2008-2009 financial and economic crisis. The only other time consumer sentiment values have been this low was in the early 1990s in the wake of the real estate crisis, when the Swiss economy suffered a prolonged recession with a dramatic rise in unemployment.

Respondents' expectations regarding general economic development deteriorated severely in April, with the relevant sub-index declining to a record low of −78 points. Expectations regarding the labour market have also worsened accordingly. The index on expected unemployment has increased more sharply within a single quarter than it has since data was first collected in 2007 and has almost reached the historical maximum of the financial and economic crisis. Job security has also been assessed worse than in previous quarters but the drop is less severe.

Respondents are also getting ready for tough times in terms of their own budget. The sub-index on the expected financial situation comes in at −24 points, with similar values so far only being observed in the early 1990s. Anticipated opportunities to save over the coming months have also been rated much more negatively than in previous quarters.

The only positive note in April comes from the assessment of the past financial situation, where the recovery of previous quarters has continued.

• More than 251,000 people around the world have died from Covid-19 and over 3.5 million people have been infected, according to data from Johns Hopkins University.

• China's National Health Commission said there was one new confirmed case of infection.

• The Institute for Health Metrics and Evaluation (IHME) estimates nearly 135,000 coronavirus deaths in the US through the beginning of August.

• Most cases reported: United States (over 1.17 million), Spain (over 218,000), Italy (over 211,900), United Kingdom (over 191,800), France (over 169,500)

EUR/USD

Resistance levels (open interest**, contracts)

$1.1016 (1281)

$1.0980 (1133)

$1.0953 (1352)

Price at time of writing this review: $1.0909

Support levels (open interest**, contracts):

$1.0885 (1315)

$1.0862 (1878)

$1.0829 (2008)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date May, 8 is 73348 contracts (according to data from May, 4) with the maximum number of contracts with strike price $1,1200 (2959);

GBP/USD

Resistance levels (open interest**, contracts)

$1.2703 (1388)

$1.2610 (1007)

$1.2533 (1083)

Price at time of writing this review: $1.2464

Support levels (open interest**, contracts):

$1.2358 (719)

$1.2281 (610)

$1.2237 (466)

Comments:

- Overall open interest on the CALL options with the expiration date May, 8 is 17214 contracts, with the maximum number of contracts with strike price $1,3000 (1441);

- Overall open interest on the PUT options with the expiration date May, 8 is 18030 contracts, with the maximum number of contracts with strike price $1,2850 (1070);

- The ratio of PUT/CALL was 1.05 versus 1.05 from the previous trading day according to data from May, 4

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.