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Oil market rebound sharply

03 Apr, 2020

Non-farm guidance market

Data and news released yesterday:

The number of initial jobless claims in the United States was 6.648 million, double the expected growth rate, and much higher than the record of 3.283 million last week.

Trump said that Saudi Arabia and Russia will ease the pressure on oil and end a price war that led to a sharp drop in the price of crude oil, with the price soaring.

U.S. Congressional Budget Office: the unemployment rate is expected to exceed 10% in the second quarter, and GDP will drop by 7%.

Federal Reserve Meister: there may be very bad economic data in the United States, with the highest unemployment rate of 15%.

Federal Reserve Kashkari said that it is almost certain that the United States is now in a recession, and the duration of the recession will be determined by the coronavirus.

Saudi Arabia called for an emergency OPEC + meeting and said OPEC + should seek a fair agreement to restore the balance of the oil market.

 

Market Volatility:

The US dollar rose for the second consecutive trading day, and the US dollar index stood at the 100 level again, rising 0.66% to around 100.10 as a whole.

The euro fell nearly 1% to close near 1.0858, after hitting a week low. The European Commission urged a new long-term budget agreement to be reached as soon as possible to support recovery from the effects of the outbreak.

USD/JPY rose 0.69% to 107.91, the first rise in seven trading days; after the end of the first quarter, the gains related to position adjustment also subsided.

The pound rose 0.20% to close at 1.2396. UK business, energy and industry strategy minister Alok Sharma said at yesterday's outbreak conference that the death rate in the UK is rising.

The spot gold returned to the top of the $1,600 level, hitting a peak of $1,612.88/ounce in the US market. The number of initial jobless claims increased, and the stock market began to decline, driving a new round of safe haven buying of gold.

Oil prices yesterday set the biggest daily increase on record. US oil rose 35% to US $27.39/barrel at one time, closing up nearly 25%, the biggest one-day increase ever. Brent oil rose 47% to US $36.27/barrel at one time, which is also the largest increase in its history.

 

CWG future forecast:

During the Asia Europe session of this trading day, few significant data were released. The market focuses on the non-farm data in the US market period. In the case of the increasingly serious epidemic in the United States, the market attaches more importance to the unemployment rate, and believes that the number of employees continues to weaken in the next few weeks. As the U.S. economy maintains a blockade, the report in April may be extremely negative.

Institutional Analysis: Danske Bank analysis believes that the outdated employment report is not expected to shock the market, and the report in April is extremely negative. The non-farm report may not have enough impact on the market, and the data may be out of date, so it is not considered to have a significant impact on the market trend this week. Generally speaking, the U.S. employment report may be regarded as the most important economic data, but the March report given on this trading day may be out of date before it is published, as can be seen from the last breakthrough of 3.3 million people applying for unemployment benefits, and this breakthrough of 6 million people.

 

Financial calendar:

No night trading will be conducted on the day when the Taiwan stock exchange is closed

16: 30 PMI of UK service industry in March

17: Monthly retail sales rate of euro zone in February

20: 30 US unemployment rate in March

20: 30 US non-farm employment after March rose adjustment

22:00 us march ism non-farm PMI

Total number of oil wells drilled in the week from 01:00 the next day to April 3 in the United States

 

CWG financial knowledge:

Changes in non-farm employment in the United States after the March quarter adjustment: the U.S. Department of labor announced that changes in non-agricultural employment is an indicator of changes in monthly employment in all Non-farm enterprises. Total non-farm employment refers to the number of workers who produce about 80% of the GDP of the United States as a whole. The data is one of the most important economic indicators in the United States and has a huge impact on financial markets. The increase in non-farm employment indicates that employment growth will be good for the US dollar; on the contrary, if non-farm employment continues to decline, it will be bad for the US dollar.