CFD Markets News and Forecasts — 07-05-2020

FXStreet notes that expectations for a historically bad payrolls report have been built up. Economists at TD Securities think FX is more likely to observe rather than react to any large extent. 

“Our -25mn forecast for payrolls allows for some undercounting of weakness in the establishment survey data as well, with some firms not responding to the BLS because they have shut down.”

“The payrolls report might trigger more reaction in FX, once it becomes clear how the reopening process in a post-Covid world unfolds. For now, we stick to our bullish USD bias in the coming weeks.”

“EUR/USD has been heavy, but the 1.0770/00 pivot has been thick. We think this will inevitably fail to hold in the coming weeks. Meanwhile, in the USD/JPY pair, the break below 107 is bearish but now that domestic holidays have passed, we could see more volatility in the cross.”

FXStreet reports that economists at Standard Chartered Bank lower the 2020 Swiss GDP forecast to -5.6% (previously -2.5%). USD/CHF trades at 0.9768.

“We revise down our 2020 growth forecast to -5.6%, from -2.5% previously. A recovery in activity in H2-2020 should underpin 2021; we now expect GDP growth of 4.5% in 2021 (previously 0.8%).”

“We revise our 2020 fiscal deficit forecast to 8.0% of GDP (from 5.0% previously) and see the deficit moderating to 5.0% in 2021 (2.5% previously).”

• Fed to err on providing too much support, not too little
• Fed will deploy its full arsenal to aid U.S. economy
  
• Hopeful virus belief takes worst-case scenario off table
• Economic impact on opening in southern states has been mixed
• Cell phone data has suggested movement has not gone up appreciably though some retailers have seen stronger than expected traffic
• Will only no adequacy of municipal, other new programs when they fully open and demand can be assessed
• Not clear yet if looser opening rules in some states is making a difference in sales or other economic activity
• It remains an open question whether current stock market level will persist

• Second wave of coronavirus is among top fears
• There is no sense for how badly economy is affected
• We must take all possible measures to weather shock
• Seeing most severe economic crisis in peacetime

The Ivey Business School Purchasing Managers Index (PMI), measuring Canada's economic activity, decreased to 22.8 in April from an unrevised 26.0 in March. This was the lowest reading on record.

Economists had expected the gauge to hit 25.0.

A figure above 50 shows an increase while below 50 shows a decrease.

Within sub-indexes, the employment measure fell to 22.98 in April from 26.8 in the previous month and the prices index dropped to 51.2 from 57.3. Meanwhile, the inventories indicator rose to 34.5 in April from 33.6 in March and the supplier deliveries gauge increased to 18.2 from 17.7.

FXStreet reports that Jennifer Lee from the Bank of Montreal (BMO) recaps the latest Initial Jobless Claims figures released by the US administration, which resulted in 3.17 million.

“For the fifth week in a row, fewer Americans filed for unemployment insurance. But at 3,169,000 in the week to May 2, well, that is still far, far above what anyone wants to see.”

“Continuing claims, climbed by 4,636,000 to 22,647,000, in the last week of April. If this series stays elevated for long, then that would be a sign of temporary losses becoming permanent.”

“As the economy slowly reopens, the numbers should start falling. These weekly figures, and other more high-frequency releases (mortgage apps, chain store sales), will be watched like a hawk.”

FXStreet reports that economists at TD Securities remain topside focused as the fundamental outlook will require higher USD/CAD.

“Technically, the USD/CAD pair is beginning to look like it has put in good work to carve out a trough just below 1.40 with a triple bottom formation. Another run through 1.41 also looks constructive from a price action point of view.” 

“More confidence would build should the 1.4265/00 pivot area fail to hold. This region has proven to be difficult to breach. We do think this will inevitably happen and we remain content in advocating a buy-on-dips stance in USD/CAD as we think the USD-leg will remain bid on a broad basis.”

U.S. stock-index futures surged on Thursday after weekly jobless claims hit their lowest level since the U.S. economy went into lockdown to fight the coronavirus pandemic. An additional support for the market was provided by hopes of an economic recovery, a rebound in oil prices and upbeat data on China's exports for April.

Global Stocks:

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

Lyft (LYFT) downgraded to Neutral from Overweight at Piper Sandler; target lowered to $31

General Motors (GM) upgraded to Buy from Hold at Deutsche Bank; target $30

The preliminary data from the U.S. Labour Department showed on Thursday that nonfarm business sector labor productivity in the United States decreased 2.5 percent q-o-q in the first quarter of 2020, as output declined 6.2 percent q-o-q and hours worked fell 3.8 percent q-o-q (seasonally adjusted).

That was below economists' forecast for a 5.5 percent q-o-q drop after an unrevised 1.2 percent q-o-q advance in the fourth quarter of 2019.

In y-o-y terms, the labor productivity rose 0.3 percent in the first quarter, reflecting a 0.1-percent uptick in output and a 0.2-percent fall in hours worked.

Meanwhile, unit labor costs in the nonfarm business sector in the first quarter jumped 4.8 percent q-o-q compared to an unrevised 0.9 percent q-o-q increase in the prior quarter.

Economists had forecast a 4.0 percent surge in first-quarter unit labor costs.

Unit labor costs quarterly increase reflected a 2.2-percent climb in hourly compensation and a 2.5-percent decrease in labor productivity.

Compared to the corresponding period of 2019, unit labor costs rose 1.5 percent.

The data from the Labor Department revealed on Thursday the number of applications for unemployment drop last week to the lowest level since the U.S. economy went into lockdown made to fight the coronavirus pandemic, but still remained evaluated.

According to the report, the initial claims for unemployment benefits totaled 3,169,000 for the week ended May 2. That brings the number of job losses over the past seven weeks to more than 33 million.

Economists had expected 3,000,000 new claims last week.

Claims for the prior week were revised upwardly to 3,846,000 from the initial estimate of 3,839,000.

Meanwhile, the four-week moving average of claims fell to 4,173,500 from a revised 5,035,000 in the previous week.

• U.S. knows "for sure" that virus originated in Wuhan China and that China covered this up
• This is not first time China's lax safety standards contributed to release of virus
• U.S. is prepared to work on trade issues with good faith
• Intelligence community has concluded that this is not man-made virus

NFXStreet reports that economists at Natixis note that the U.S.-China relationship was severed in 2014, despite the cost of doing so in terms of economic efficiency.

“From the 1990s to 2013, the US and China formed a mutually beneficial relationship: the United States had a significant trade deficit with China, which China financed by buying US Treasuries.” 

“China became a threat to the United States’ technological leadership since China’s role as a production hub naturally led it to produce sophisticated goods to meet demand.”

“The US severed this relationship to preserve its leadership, which has come at an economic cost since the previous arrangement was efficient for both countries: a shift has taken place from a logic of economic efficiency to one of preserving a dominant position.”

GBP traded mixed against its major rivals in the European session on Thursday as market participants weighed the BoE's latest policy decision and the comments of the EU's trade commissioner Phil Hogan on the ongoing Brexit talks. The pound rose against USD, JPY, EUR and CHF, but fell against AUD, CAD and NZD.

The members of the Bank of England's (BoE) Monetary Policy Committee (MPC)voted 9-0 to leave its key interest rate at 0.1 percent, as widely expected. In addition, the asset purchase program was left at GBP 645 bln, though two members voted for a GBP 100 bln increase in the target for the stock of asset purchases. The BoE's governor Andrew Bailey said the policymakers were "keeping all options open" and they "could do more QE" in June.

The EU's trade commissioner Phil Hogan said that, despite the urgency, the EU and the UK were making "very slow progress" on Brexit talks. He also added that he saw no sign of the UK approaching Brexit talks with a plan, but expressed hopes that they could see a change in negotiations next week.

• Bad jobs report would understate damage because many people are not looking for work
• We can avoid a depression scenario but we're in for a long gradual recovery,
• Recovery will be gradual on business-by-business basis until we have COVID-19 vaccine or therapy

FXStreet reports that analysts at TD Securities note the Bank of England (BoE) left monetary policy unchanged today while GBP/USD squeezed a touch higher in the aftermath of the decision.

“The BoE left Bank Rate unchanged at 0.10% today in a 9-0 vote, and left asset purchases unchanged at £645bn in a 7-2 vote, with two members preferring to announce another £100 of asset purchases at today's meeting.” 

“We look for an additional £100bn of QE to be announced at the June meeting.” 

“1.2420 should cap any further squeeze higher while a push above toward 1.2450 looks likely to attract more pronounced selling interest.” 

“With the USD currently on a more defensive footing (for now), we think bids could emerge around 1.2360. The overnight low at 1.2311 seems fairly secure for the near term - at least for now.”

• BoE could do more QE in June
• We're nowhere near using negative rates
• Doesn't want to overdraw the distinction between BoE policy and open-ended QE

FXStreet reports that Credit Suisse’s analysts suggest the GBP/USD pair would confirm a “double top” below 1.2248 with support next at 1.2176/66.

“We look for a test of important price support at 1.2248, removal of which remains needed to see a ‘double top’ confirmed to mark a more decisive turn lower in line with our broader topping scenario. We would then see support next at 1.2176/66 – the April low and 38.2% retracement of the March/April rally.” 

“Resistance moves to 1.2418/21 initially, with the 55-day average at 1.2450 now ideally capping further strength.”

Raytheon Technologies (RTX) reported Q1 FY 2020 earnings of $1.78 per share (versus $1.91 per share in Q1 FY 2019), beating analysts' consensus estimate of $1.05 per share.

The company's quarterly revenues amounted to $18.210 bln (-0.8% y/y), beating analysts' consensus estimate of $17.031 bln.

RTX rose to $60.15 (+3.85%) in pre-market trading.

• UK attempting to row back on legal promises on Brexit
• UK operating on basis that transition phase won't be extended
• Despite the urgency, we're only making very slow progress on Brexit talks

FXStreet reports that economists at Rabobank report the Bank of England (BoE) left its policy settings unchanged at the May meeting.

“While the vote to keep Bank rate at 0.1% was unanimous, two MPC members (Haskel and Saunders) voted to increase the target for the stock of asset purchases by another GBP 100bn.”

“We continue to expect a GBP 100bn increase to be announced at the June meeting.”

“GDP would be close to 30% lower in 2020 Q2 than it was at the end of 2019. After this incredibly deep recession, the MPC expects a relatively quick bounce back in the latter part of 2020 and into 2021.”

“We suspect that the recovery will be much slower. While economies can be easily turned off by their governments, it will prove much harder to flick them back on.”

• German court ruling looks as if it runs counter to what European Court of Justice indicated just over a year ago but ECB itself acts very transparently
• There will not be impact from ruling on ECB's actions to ensure there is adequate liquidity throughout the eurozone

PayPal (PYPL) reported Q1 FY 2020 earnings of $0.66 per share (versus $0.78 per share in Q1 FY 2019), missing analysts' consensus estimate of $0.74 per share.

The company's quarterly revenues amounted to $4.618 bln (+11.8% y/y), missing analysts' consensus estimate of $4.717 bln.

PayPal also said it expected its Q2 revenue would grow ~13% at current spot rates and ~15% FXN, while its Q2 GAAP EPS would decline by 28-34% and Q2 non-GAAP EPS would grow by 15-20%.

The company withdrew its FY 2020 revenue and earnings guidance.

PYPL rose to $138.00 (+7.55%) in pre-market trading.

Lyft (LYFT) reported Q1 FY 2020 GAAP loss of $1.31 per share (versus -$9.02 per share in Q1 FY 2019), worse than analysts' consensus estimate of -$0.63 per share.

The company's quarterly revenues amounted to $0.956 bln (+23.2% y/y), beating analysts' consensus estimate of $0.830 bln.

Meanwhile, Lyft's average riders increased 3% y/y to 20.5 mln.

LYFT rose to $29.90 (+14.47%) in pre-market trading.

FXStreet reports that Australia's Covid-19 trend is very encouraging but given the brutal economic data facing the world in coming weeks, equities should drag the Aussie back to 0.62 or below, according to Westpac.

"We suspect that the Aussie will be unable to ignore any broad-based weakening in global risk appetite, which we continue to expect in coming weeks."

"Our end-June forecast is 0.62 but the first target should be the 50-dma, currently 0.6284."

"Confirmation of a huge drop in employment on 14 May could be one catalyst for renewed AUD/USD decline."

Reuters reports that more than three-quarters of British businesses continued to trade last month during the coronavirus lockdown, but most of them reported a drop in turnover, official data published on Thursday showed.

The Office for National Statistics also said 67% of companies it surveyed had applied for the government's Coronavirus Job Retention Scheme, which provides funding for wages.

The vast majority of businesses in the accommodation and food service, and arts and recreation sectors, were not trading, the ONS said.

FXStreet reports that the biggest market reaction will hinge on what the RBNZ says (or doesn't say) about the possibility of a negative OCR, in the opinion of economists at Westpac Institutional Bank.

"An expansion of QE to $60bn would be no great surprise to markets and would cause only a small market reaction."

"In our preferred scenario of the RBNZ giving a 'soft' indication that it intends to keep the OCR at 0.25% until March 2021, but that it remains open to a cut after that, markets would move little."

"In the possible scenario of the RBNZ giving an iron-clad guarantee that the OCR will stay at 0.25% until March, but indicating that the OCR could go negative after that, short-end swap rates would rise."

• We will continue to come up with appropriate responses

• BOE is clearly committed to take action when needed

• Appropriate that BOE continues with aggressive pace of QE for the moment

• We will take stock of that, there's still another meeting before QE completion

• Information about lifting lockdown measures will be material to June discussions

CNBC reports that according to Andrew Harmstone, head of global balanced risk control strategy at Morgan Stanley Investment Management, the fear of missing out has played a role in recent market movements but that's "not a good sign,"

"The fear ... of missing out, or another term for that traditionally has been greed, right? It is definitely playing a role in the current market," he told CNBC.

Markets saw a relief rally in April, with the S&P 500 and Dow Jones Industrial Average posting their best monthly performances since January 1987. But the surge came after the initial shock of the coronavirus pandemic and a historic plunge in global equities in March.

Harmstone argued that the gains came as investors denied the "damage that's actually been occurring to the global economy." He explained the behavior indicated that "people still think that things are going to go back to normal, or what they were recently, quite quickly."

Investor optimism has been fueled by the prospect of authorities lifting lockdowns and relaxing other restrictions intended to curb the spread of the coronavirus. Those measures had taken a huge toll on global economic activity.

But the real extent of that damage will become "visible" in the next phase, beginning with "actual bankruptcies" or at least downgrades of companies, Harmstone said. The market is likely to respond accordingly, he warned.

"The key element here is that volatility remains extremely high," Harmstone said. With the markets seeing big shifts in either direction every day, a 1% move is comparatively "small" nowadays, he added.

For investors, this means that they need to keep their portfolio risk level low and maintain a defensive position while looking for opportunities to add value, Harmstone said.

According to the report from Istat, in March 2020 the seasonally adjusted index of retail trade sharply fell by 20.5% in value terms in the month on month series, while the volume decreased by 21.3%. These are the largest drops since the series began, as many stores ceased trading from 11 March following official government guidance during the coronavirus (COVID-19) pandemic.

In the first quarter of 2020 value and volume of retail sales were down -5.8% and -5.9% respectively when compared with the fourth quarter of 2019.

The year-on-year series shows a strong decline in March 2020, as value decreased by -18.4% and volume dropped by -19.5%. Although value of food sales rose by +3.5%, value of non-food sales was down 36.0% from March 2019.

Large-scale distribution fell by 9.3% compared with the same period a year earlier, while small-scale distribution reported an even stronger reduction of 28.2%.

In March 2020, non-store sales were down 37.9% in the year on year series.

Online sales was the only channel of distribution recording a growth, increasing by 20.7% when compared with the same month a year earlier.

According to the report from IHS Markit, the Eurozone Construction Total Activity Index fell even further in April, following the substantial drop in March. At 15.1, the figure recorded a new record low, falling from 33.5 in March, signalling an unprecedented month-to-month decline in construction activity across the eurozone. Survey data showed Italy and France recorded extreme contractions in construction output, while Germany registered a far slower decline but one that was still marked overall.

April data showed a substantial fall in home building activity across the eurozone following a marked decline in March. The rate of contraction was the fastest seen in the over 20-year survey history, led by France and Italy, which reported extreme rates of decline.

Work undertaken on commercial construction projects in the eurozone likewise contracted at a severe pace in April, as indicated by the respective seasonally adjusted index registering significantly below the no-change 50.0 level. The rate of decline was unprecedented in over 20 years of data collection.

Despite substantially reduced purchasing demand, supply chains remained under pressure. Delivery times lengthened to the greatest extent in the series history and at a rate that was severe overall. Cost burdens faced by eurozone construction firms rose further in April. However, the rate of inflation was the slowest for just over four years.

Finally, eurozone building companies remained pessimistic about future activity in April, with the Future Activity Index coming in well below the neutral 50.0 level. Concerns over the economic impact of the COVID-19 pandemic on construction activity were commonly mentioned.

FXStreet reports that economists at Standard Chartered Bank downgrade the Canadian 2020 GDP forecast as surveys and employment data point to a deep recession in the first half of 2020.

"We expect the economy to contract by 8.0% in 2020 (previously -4.0%), with H1 in deep recession. A recovery in activity in H2-2020 should underpin 2021; we expect GDP growth of 6.7% in 2021 (previously 2.7%)."

"Employment fell by over 1mn in March (eight times as much as the previous record decline in 2009); job losses could exceed 5mn, taking the unemployment rate to 30% or higher."

"A rate cut to 0.10% or 0.15% cannot be ruled out."

According to the report from Halifax Bank of Scotland, on a monthly basis, house prices in April were 0.6% lower than in March. Economists had expected a 0.7% decrease.

House prices in April were 2.7% higher than in the same month a year earlier.

In the latest quarter (February to April) house prices were 0.7% higher than in the preceding three months (November to January).

Russell Galley, Managing Director, Halifax, said: "The impact of measures taken to curtail the spread of coronavirus started to filter through to the housing market in April, with average prices falling by 0.6% compared to March, and the annual growth rate easing to 2.7%. With market activity currently almost at a complete standstill, the limited number of transactions available means that calculating average house prices has inevitably become more challenging. This will lead to a great deal of volatility until more data becomes available. It will not be until after lockdown restrictions are eased that we will get a sense of the new temporary normal conditions for the housing market. Social distancing raises new challenges for home viewings and valuations and this will require the industry to adapt to build and maintain consumer confidence. More immediately, we are likely to see some considerable movement in activity levels as buyers and sellers seek to kick-start previously agreed transactions which are likely to have stalled or been delayed. The future remains uncertain and based on our current forecasting we expect short term headwinds to house prices, although we maintain our underlying confidence in the health of the housing market in the longer term."

• ECB constantly monitoring the situation

• ECB policy has provided crucial support to the economy

• Inflation will likely fall further in the next few months

• PEPP helping to forestall undue tightening of financial conditions

• Fiscal actions are the first line of defense

eFXdata reports that Bank of America Global Research discusses EUR/USD outlook and outlines 6 key reasons for staying structurally bearish on the pair over the coming months targeting a move towards 1.02.

"Though EURUSD is undervalued by about 10%, according to our estimates, we see it weakening further in the rest of the year . We forecast EURUSD at 1.02-1.05, with risks to the downside.

We expect EURUSD to weaken in the months ahead, given: a weaker global outlook, a more severe Eurozone recession, a weaker Eurozone macro policy response, periphery sovereign risks, low oil prices, and a long EUR market position," BofA argues.

We would be wrong and EURUSD would strengthen if a cure or vaccine for COVID-19 were to be found soon, as the global outlook would improve substantially, or if the Europeans were to mutualize a substantial part of the increase in the government debt-through a Eurobond/Corona bond-but this seems unlikely," BofA adds.

During today's Asian trading, the US dollar fell slightly against the euro, following yesterday's strengthening.

Meanwhile, demand for the japanese yen persists, as investors limit investments in risky assets amid pessimistic economic data, escalating contradictions between the US and China and concerns about the Euro zone economy.

The European Commission expects the Eurozone's GDP to fall by a record 7.75% in 2020, according to a spring forecast. In 2021, it is expected to rise by 6.25%. The EU's GDP is forecast to collapse by 7.5% this year and increase by about 6% next year.

The ICE Dollar index, which shows the value of the us dollar against six major world currencies, rose by 0.04% compared to the previous day.

The pound rose sharply against the US dollar after the Bank of England kept its benchmark interest rate at 0.1%, did not increase asset repurchases at the end of the meeting on Thursday.

Data on China also came into focus. Chinese exports unexpectedly rebounded in April on the back of a gradual resumption of business activity, while the pace of falling imports accelerated strongly.

According to the report from Insee, at the end of the first quarter of 2020, private sector wage employment dropped by 2.3%, or 453,800 net job losses in one quarter. Compared to the end of the first quarter 2019, employment is down 1.4%, that is -274,900 jobs. It returned to its lowest level since the third quarter of 2017.

In the so-called "non-agricultural market" field (industry, construction and market services), payroll employment has been measured in quarterly time series since the end of 1970. In the first quarter of 2020, it fell by 2.6% in this field (-442,200 jobs): this is the largest drop recorded in the series. In particular, it is significantly sharper than the troughs observed in the fourth quarter of 2008 (-0.8%) and the first quarter of 2009 (-0.9%).

The number of temporary workers fell by an unprecedented 37.0% in the quarter, that is -291,800 jobs. Excluding temporary workers, payroll employment fell by 0.9% (-162,000 jobs).

Private payroll employment (excluding temporary workers) in the construction sector has held up well after twelve consecutive quarters of growth: +0.4% compared with +0.7% in the previous quarter (i.e. +5,700 jobs after +10,100). Over one year, it has risen by 33,600.

According to the report from Insee, in March 2020, output slumped in the manufacturing industry (−18.2%, after +0.9%), as well as in the whole industry (−16.2%, after +0.8%). Economists had expected a 12.4% decrease in the whole industry..

Over the last quarter, output decreased sharply in manufacturing industry (−6.1%), as well as in the whole industry (−5.6%).

Over this period, output slumped in the manufacture of transport equipment (−14.3%) and in the manufacture of coke and refined petroleum products (−14.0%). It also diminished in "other manufacturing"(−5.8%), in the manufacture of machinery and equipment goods (−5.3%), in mining and quarrying, energy, water supply (−2.6%). Output fell moderately in the manufacture of food products and beverages (−0.7%).

In the manufacturing industry, cumulative output over the last quarter declined sharply compared to the same quarter a year ago (−7.8%), as well as in the whole industry (−7.3%).

Over a year, quarter's output went down sharply in "other manufacturing" (−6.1%), in the manufacture of transport equipment (−17.4%), in the manufacture of machinery and equipment goods (−9.4%) and in mining and quarrying, energy, water supply (−4.4%). It slumped in the manufacture of coke and refined petroleum products (−40.0%). It declined more moderately in the manufacture of food products and beverages (−1.2%).

According to the report from Federal Statistical Office (Destatis), the production in Germany decreased significantly in March 2020 because of the coronavirus pandemic. In March 2020, production in industry was down by 9.2% on the previous month on a price, seasonally and calendar adjusted basis. This is the largest decline since the beginning of the time series in January 1991. Economists had expected a 7.5% decrease.

In March 2020, production in industry excluding energy and construction was down by 11.6%. Within industry, the production of intermediate goods decreased by 7.4% and the production of consumer goods by 7.5%. The production of capital goods showed a decrease by 16.5%. A sharp drop was recorded by the automotive industry (-31.1%). Printing and reproduction of recorded media (-12.5%), pharmaceutical products (-11.8%) and the clothing industry (-11.5%) also saw marked declines. Outside industry, energy production was down by 6.4% in March 2020 and the production in construction increased by 1.8%.

In February 2020, the corrected figure shows the production in industry an increase of 0.3% from January 2020, thus confirming the provisional result published in the previous month.

• The Bank of England's Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment. In that context, its challenge is to respond to the severe economic and financial disruption caused by the spread of Covid-19.

• At its meeting ending on 6 May 2020, the MPC voted unanimously to maintain Bank Rate at 0.1%.

• The Committee voted by a majority of 7-2 for the Bank of England to continue with the programme of £200 billion of UK government bond and sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, to take the total stock of these purchases to £645 billion.

• Two members preferred to increase the target for the stock of asset purchases by an additional £100 billion at this meeting.

• The spread of Covid-19 and the measures to contain it are having a significant impact on the United Kingdom and many countries around the world.

• Activity has fallen sharply since the beginning of the year and unemployment has risen markedly.

• Economic data have continued to be consistent with a sudden and very marked drop in global activity.

• Oil prices have been volatile.

• There have, however, been tentative signs of recovery in domestic spending in China, and this is likely to be echoed in other countries that have started to relax Covid-related restrictions on economic activity.

• Financial markets have recovered somewhat over recent weeks and risky asset prices have picked up from their lows in mid-March. This in part reflects the actions taken by authorities in the United Kingdom and elsewhere. Global financial conditions have, nevertheless, remained tighter than prior to the outbreak of Covid-19.

• The timeliest indicators of UK demand have generally stabilised at very low levels in recent weeks, after unprecedented falls during late March and early April.

• Payments data point to a reduction in the level of household consumption of around 30%.

• Consumer confidence has declined markedly and housing market activity has practically ceased.

• CPI inflation declined to 1.5% in March and is likely to fall below 1% in the next few months, in large part reflecting developments in energy prices.

• CNBC reports that Brazil reported 10,503 new confirmed cases in the last 24 hours, a new daily high from its last record of 7,288 cases on April 30. Fatalities rose by 615, also a new high compared with the 600 reported Tuesday.

• American Airlines will require all team members to wear face coverings while they are at work starting Friday, especially those interacting with customers.

• China reported both its two new cases were imported, or attributed to travelers coming from overseas. There were no new deaths, with total fatalities remaining at 4,633, according to its National Health Commission.

• Global cases: More than 3.75 million

• Global deaths: At least 263,000

• Most cases reported: United States (1,228,603), Spain (220,325), Italy (214,457), United Kingdom (202,356), France (174,224).

EUR/USD

Resistance levels (open interest**, contracts)

$1.0903 (1279)

$1.0861 (710)

$1.0833 (616)

Price at time of writing this review: $1.0793

Support levels (open interest**, contracts):

$1.0743 (1562)

$1.0697 (2100)

$1.0648 (1302)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date May, 8 is 73068 contracts (according to data from May, 6) with the maximum number of contracts with strike price $1,1200 (2957);

GBP/USD

Resistance levels (open interest**, contracts)

$1.2551 (381)

$1.2502 (1249)

$1.2457 (811)

Price at time of writing this review: $1.2328

Support levels (open interest**, contracts):

$1.2277 (1056)

$1.2238 (554)

$1.2193 (924)

Comments:

- Overall open interest on the CALL options with the expiration date May, 8 is 17358 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 18653 contracts, with the maximum number of contracts with strike price $1,2850 (1070);

- The ratio of PUT/CALL was 1.07 versus 1.05 from the previous trading day according to data from May, 6

* - 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.