Market News & Analysis
Jobless claims shock markets
Fiona Cincotta March 27, 2020 6:21 PM
The shockingly high number of new jobless claims in the US yesterday has poured icy water on the market's recent rallies, causing the FTSE and other European gauges to open lower. Rising to 3.3 million from only 281,000 last week, the number was at the high end of expectations fuelling concerns about how much worse the situation in the US economy could become before the corona crisis is over.
The most worrying aspect is that at 85,000 corona cases in the US, more than during the whole three months of the outbreak in China, the virus is only beginning to demonstrate its full strength and then only in a few of the US largest cities.
In London, house builders are under pressure after the UK government effectively suspended the property market by banning estate agents from marketing new homes and asking them to stop arranging visits for properties on sale. The move came as a request from banks which were concerned about lending in the current environment.
Travel firms are also struggling as the spread of the virus worsens.
The safe haven assets are yet again thin on the ground and only United Utilities and gold miner Polymetal are trading in the black, by a small margin.
Oil producers in a corner
The irony in the oil market is that in January, at the beginning of the coronavirus outbreak, Russia rejected Saudi Arabia’s suggestion to cut production to bolster the decline in oil price. Russia stalled on its answer and eventually said it would increase its sales in April. Now that prices have more than halved from over $60 to a band between $26-$28 Russia is talking about cutting a deal with OPEC producers to pump less oil from next month. With oil prices at current lows, old hatchets may end up being buried, particularly as the spread of the virus speeds up across the globe. Brent crude is holding just a whisker above $26 which is proving a good resistance level, that has been breached only briefly this week before returning above it.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.
Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.