The
early week optimism faded on the back of mixed but mostly negative corporate results in the US, hundreds of earning calls proving that the
economic collapse due to the coronavirus has been far worse than the 2008 subprime crisis according to a Fed study, and a devastating jobs
report.
The
ADP report confirmed that the US economy erased more than 20 million private jobs last month. The figure was better than expected, but at this
level, the better-than-expected is already cataclysmic.
The
US stocks gave up on their gains. The Dow (-0.91%) and the S&P500 (-0.70%) closed the session in the negative, while Nasdaq (+0.51%)
showed some resilience.
The
US treasury will fuel the long-term financing by issuing a record $96 billion of debt next week. 20-year bonds will be issued for the first
time since mid-1980s to boost the government financing. The US 10-year yield remains capped below the 0.70% mark and the US dollar is back
above the 100 mark on the back of a swift move to safety.
The
USDJPY tests the 106-support as the yen benefits from the safety inflows as well, but the USDCHF trends higher, hinting that the Swiss
National Bank (SNB) could have its finger in the pie.
The
EURUSD slipped below the 1.08 mark and remained offered above this level in the overnight trading session. The rising concerns that the
European Central Bank (ECB) may see its scope of action limited at the worse imaginable time for the economy is weighing on the single
currency and even news that the lockdown is being slowly unwound across Europe isn’t enough to fight back the euro bears, as the mediocre
economic data continues pouring in, confirming that the European economy cannot afford losing the ECB’s support now.
