- The rate of increase globally in fatalities and new confirmed infections from the coronavirus pandemic continues to increase exponentially, with total confirmed cases just short of 2 million and a death rate of approximately 6%. Its epicenter is now located in New York. A world recession or possibly even depression appears to be inevitable, with Goldman Sachs forecasting a 34% drop in U.S. Q2 annualized GDP and other analysts seeing a 30% unemployment rate in the near future. If correct, these will be the worst such numbers seen since the 1930s, but it should be noted many analysts continue to see a much better outlook for U.S. unemployment. The WTO has forecasted that global trade is set to fall by one third.
- There is increasing discussion of the economic cost of the pandemic in hard hit countries and talk of reopening economies, especially in the United States. However such plans seem detached from the reality of the situation. Governments will try to find creative solutions to this dilemma.
- The price of Gold hit a 7-year high price above $1700 an ounce yesterday, suggesting a break to still higher prices is likely.
- Despite the gloomy global economic outlook, stock markets (especially in the U.S.A.) are still rising, and other risky assets continue to rise. Major U.S. stock indices have regained half of the value lost during its recent fall from peak to low – exceeding this would be technically significant. Many analysts think the bottom of this bear market has already been reached, but other analysts see further strong falls likely in stocks over the coming weeks and months. There is a strong divergence of opinion.
- There are signs that the first wave of the coronavirus pandemic has already peaked in Italy, Spain, and France. The U.K. and the U.S.A. may be approaching their respective peaks, with initial signs of a decrease in the rate of new cases, but seem to be further behind the other nations. All countries mentioned (except the U.K.) have had more than 100,000 confirmed cases. Some forecasters are starting to see the U.K. as likely to end this wave with the highest death toll in Europe. The strongest growth of the virus in the world now is happening in New York City and New York State, with the U.S.A. now leading the world in number of confirmed cases (more than half a million, more than one quarter of the global total), and having suffered more than 23,000 deaths so far. Even in Germany, the death rate to confirmed infections has risen to more than 2%.
- A few OECD nations appear to have coped relatively well at containing this first wave of coronavirus infections, and are beginning to consider relaxing lockdown restrictions, especially Denmark, Austria, Norway, Australia and Israel.
- WTI Crude Oil is falling again after news of an output deal between the major oil producers, following its recovery last week from its recent sharp fall to an 18-year low below $20.
- Currency markets are currently dominated by relative strength in the Australian Dollar and other risky assets, while the U.S. Dollar is clearly the weakest currency today.
- Markets have been affected by high relative volatility, but this is generally decreasing, although stocks are still showing high volatility.
- There are no high-impact economic data releases scheduled for today.