A risk-off tone kicked off this morning, as Asian equity bourses broadly closed weaker and European stock markets are also starting on weaker footing, at time of writing. Meanwhile, USTs are trading lower this morning with the 10-year below 0.62%. Further stimulus measures from the likes of China and the US - who has said it will look to measures to prop-up small businesses - may boost sentiment. Meanwhile, WTI’s plunge to 21-year lows to below $15 will no doubt put further pressure on oil producing nations, including the US, to cut output, especially as global reserves are nearing full capacity. In a joint statement, following a call between the Saudi and Russian Energy Ministers, both nations will reportedly “continue to closely monitor the oil market and are prepared to take further measures jointly with OPEC+ and other producers if these are deemed necessary”.
This week kicked off with UK housing data which, as was widely expected, has dipped following government policy to freeze transactions during lockdown. Also of interest today, post-brexit negotiations between the UK and the EU resume and will continue to be discussed through the week. Later today the Chicago Fed National Activity Index print for March is expected to have fallen by -3. The UK Parliament will return from its Easter break on Tuesday as pressure mounts for the government to do more to support the economic effects of the outbreak. The US housing data and the UK unemployment rate will be watched closely tomorrow. Earth Day 2020 follows on Wednesday. Euroarea consumer confidence and France’s manufacturing confidence gauges could also be of interest.
As some nations look to unwind their lockdown policies somewhat, EU leaders will remotely gather on Thursday to thrash out a collective response to tackling the virus outbreak including the likelihood of joint bond issuance. New home sales in the US are due to be released on Thursday with expectations of a -15.8% slide in March. We will also have the UK’s retail sales, and EU and UK Markit PMI readings which could give further clues as to the economic impact from Covid-19. Despite supply chain concerns following the shutdown across China’s manufacturing industry, Friday sees the launch for Apple’s iPhone SE, the company’s most affordable phone release in 4 years. On the data front we will have Germany’s March IFO reading and US durable goods and sentiment prints on Friday.