- The rate of increase globally in fatalities and new confirmed infections from the coronavirus pandemic continues to increase exponentially, with its epicenter now in New York. A world recession 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 since the 1930s.
- The rate of increase in new confirmed cases is now levelling off in much of hard-hit Europe, especially in Italy, providing hope that lockdowns are beginning to show results. However, the daily death toll remains high in Europe and is beginning to increase strongly in the U.K. 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. In Europe, the United Kingdom and France appear statistically to be on course for a slightly better outcome than Italy, with Spain heading for something even worse.
- World stock markets, especially in the U.S.A., look set to fall again after rallying for several days as President Trump markedly changes his tone on the coronavirus pandemic, forecasting up to 240,000 fatalities in the U.S.A. The Federal Reserve intervened yesterday to improve U.S. Dollar liquidity throughout the U.S. banking system.
- WTI Crude Oil has recovered from its 18-year low to again trade above $20, but it still looks weak.
- Currency markets appear to be consolidating and showing no clear direction today, although the USD is showing minor short-term strength.
- Markets are affected by high relative volatility, although it is decreasing. This provides opportunities for traders, but close monitoring of trades on short time frames is very advisable due to the strength and speed of price movements.
- The key factor in markets today will likely be how the U.S. stock market behaves when New York opens, as well as the ADP Non-Farm Payrolls forecast which could give some insight into Friday’s likely U.S. unemployment numbers.