It’s hard to be a raging pessimist when lockdowns are lifting in the next few weeks. Italy and Spain, the worst-hit European nations amid the pandemic, both moved to relax curbs, while California said it might allow some lower-risk businesses to open as soon as Friday.
Still, investors remain cautious while digesting the coronavirus' impact on manufacturing data and the risks of easing lockdowns in major economies where critics abound, concerned the latter could reignite the virus' spread.
And omnipresent trade war clouds continue to hang ominously as the US-China relationship is likely to take a turn for the worse. But for risk markets this transition will come gradually, most likely in fits and starts.
As widely expected, the RBA keeps the cash rate and 3-year yield target unchanged at 0.25%,.
With RBA Governor Lowe having already updated the RBA's forecasts in his speech on Apr. 21, the RBA hold today is unlikely to be a market-moving event. The risk is more taper-talk, but this seems to be in the price now.
While the dollar traded a bit weaker in Asia it’s not cracking as G-10 traders continue to buy the dips, fearing the worst for the global economy is far from over and as risk rises in the East.
Oil continued to rally in Asia after the pace of stockpile builds in the US storage hub slowed last week. Futures continued to climb in Asia after Genscape reported bullish to expectations a 1.8 million-barrel build in inventories in Cushing, Oklahoma, the delivery point for West Texas Intermediate crude.
And if the Genscape data presages the API and EIA inventory data this week, it could effectively carve out a new baseline equilibrium at higher prices as oil market rebalancing kicks into in full swing.
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Stocks soar, powered by first-rate earnings and a dazzling run of economic data; Gold plays catch as G10 falls flat while oil basks in the afterglow