Market News & Analysis
Lockdown Easing Overshadows Second Wave Fears & Terrible US Data
Fiona Cincotta May 11, 2020 2:25 PM
The markets are showing an extraordinary ability to focus on the positive whilst proving to be immune to terrible data. Stock indices across Europe and the US closed higher on Friday despite data revealing that 20.5 million US jobs have been lost and the unemployment rate striking 14.7%. There is a strong feeling that the worst is behind us which boosting risk sentiment. However, the current optimism combined with fear of missing out raises doubts over whether the markets are truly comprehending what 14.7% US unemployment means.
The Pound is pushing higher, versus both the US Dollar and Euro and investment confidence in the UK is expected to receive a boost after Boris Johnson eased lockdown measures in England and as the number of coronavirus daily deaths were at the lowest level in a month. People in England can now exercise outside more frequently whilst those who haven’t been able to work from home are encouraged to return to work today. Construction sites and manufacturing plants will start reopening whilst those working from home are encouraged to still do so. After 7 weeks in lock down there is finally some visibility as the PM laid out a three-stage plan to easing lockdown measures.
Furlough scheme extension?
Adding to the improving mood, rumours are also circulating that Chancellor Rishi Sunak will extend the government’s hugely popular job retention scheme until September. This will be at 60%, rather than the current 80% although it will also include topping up staff’s pay packets who are going back to work on a part time basis. There is no question that this is a hugely expensive scheme for the government. However, it has also proved to be extremely popular and could go a long way to ensuring that consumer confidence returns quickly which will be essential for any chance of a rapid recovery for the UK economy.
There is no high impacting data due for release today. Week long Brexit trade talks kick off today and could drive the pound.
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.