Monday, April 6, 2020

Asia Times: OPEC+ may push back meeting to April 9th as tension between Saudi Arabia and seemingly Russia escalate over the weekend

Tags
  • Dollar
  • Gold
  • Yen
  • Stocks
  • NonFarm Payrolls
  • Oil
  • DXY
  • Brent

04062020a

Market Recap: OPEC+ may push back meeting to April 9th as tension between Saudi Arabia and Russia seemingly escalate over the weekend

Stocks on Wall Street fell on Friday after payroll data on Friday disappointed financial markets by a wide margin. Change in NonFarm payrolls unexpectedly plunged by 701,000 in March, dropping much more than economists' forecasts for a 100,000 decline. But with March's payroll data unlikely to fully reflect the impact of the coronavirus on employment, April's employment numbers may be even worse. Stocks in the consumer staples sector in the S&P500 managed to inch slightly higher on Friday by 0.54% to lead the S&P500 while the utilities sector performed the worse, falling 3.62%.

Indexes Daily Change (%) Net Change Closing Price
Dow Jones -1.69% -360.91 21,052.53
S&P500 -1.51% -38.25 2,488.65
Nasdaq -1.53% -114.23 7,373.08
*Source: Bloomberg

Among major indices, only the CSI300, KOSPI and ASX200 gained over last week. Losses for US major indices over the week were more than 2%, although the Nasdaq only fell 1.72%. The Nikkei suffered the most, losing 8.09% as the Japanese yen strengthened 0.57% against the dollar over last week.

Indexes Weekly Change (%) Net Change Closing Price
Dow Jones -2.70% -584.25 21,052.53
S&P500 -2.08% -52.82 2,488.65
Nasdaq -1.72% -129.29 7,373.08
FTSE100 -1.72% -94.83 5,415.50
Euro Stoxx -2.41% -65.66 2,662.99
CSI300 +0.09% +3.16 3,713.22
Nikkei -8.09% -1,569.24 17,820.19
KOSPI +0.45% +7.71 1,725.44
ASX200 +4.65% +225.05 5,067.48
Hang Seng -1.06% -248.17 23,236.11
Straits Times -5.52% -139.47 2,389.29
*Source: Bloomberg

In the forex market, the greenback gained against all major currencies on Friday, pushing the Dollar Index higher by 0.40%. The worse-than-expected labour market data likely contributed to demand for the greenback as investors shifted towards safer assets. The market's optimistic view on oil prices also likely helped the greenback gain as well after the price war between Saudi Arabia and Russia appeared to be easing towards the end of last week.

British Prime Minister Boris Johnson was hospitalised thanks to persistent coronavirus symptoms that lasted 10 days. The British government maintains that Johnson's hospitalisation is only a precautionary one and that he still remains in charge of the British government. Sterling fell against the dollar as a result on Monday morning, losing 0.36% as of 8.10am (GMT +8).

04062020b

Safe haven assets were mostly mixed last Friday. Gold gained for the third trading session in a row, but was still 0.45% lower over last week's level of 1,628.16. The yen fell against the dollar but still managed to strengthen 0.57% against the greenback by the end of the week. US Treasuries were mostly flat with the exception of 30-year bonds which rose on Friday, pushing 30-year yields 3bps higher. Benchmark 10-year yields remained flat, only inching slightly lower by 0.2bps to 0.59%.

Safe Haven Assets Daily Change (%) Net Change Closing Price
Gold +0.42% +6.82 1,620.81
Silver -0.70% -0.10 14.28
JPY -0.59% -0.64 108.55
*Source: Bloomberg
US Treasury yields Daily Change (%) Yield (%)
2-Year +0.3 0.23%
10-Year -0.2 0.59%
30-Year -3.0 1.21%
*Source: Bloomberg

Oil prices surged double digits for the second day in a row on Friday, with Brent spiking 13.93% and WTI increasing 11.93%. But tension between Saudi Arabia and Russia grew over the weekend, with OPEC+ reportedly delaying its meeting to April 9th tentatively. Oil prices dived on Monday morning as a result. Brent fell 4.81% while WTI tumbled 6.70% as of 8.31am (GMT +8).

Oil Futures Daily Change (%) Net Change Closing Price
Brent Crude +13.93% +4.17 34.11
WTI Crude +11.93% +3.02 28.34
*Source: Bloomberg

Stocks in Asia started the week in the green with the Nikkei, KOSPI and ASX200 all positive in the first hour of Monday's trading session. Futures tracking major indices in the US also gained despite cases of the coronavirus growing past 330,000 in the US. Fear in financial markets looks to be easing on Monday after US President Donald Trump and Vice President Mike Pence said that there were signs that the US coronavirus outbreak is beginning to stabilise after New York reported deaths lower than the day before.

Asia Daily Change (%) Net Change Last Price As of (GMT +8)
Nikkei Index +0.03% +6.21 17,826.40 8:03:00 AM
KOSPI Index +1.86% +32.07 1,757.51 8:23:00 AM
ASX200 Index +2.16% +109.62 5,177.10 8:22:35 AM
*Source: Bloomberg
US Futures Daily Change (%) Net Change Last Price As of (GMT +8)
Dow Futures +2.20% +462.00 21,418.00 8:24:55 AM
S&P500 Futures +2.30% +57.00 2,539.25 8:24:55 AM
Nasdaq Futures +2.63% +197.50 7,720.00 8:24:55 AM
*Source: Bloomberg

Samsung will be releasing its earnings report for Q1 2020 later today. Tech investors in particular should be focused on the South Korean electronic giant's earnings as an indicator of the coronavirus' impact on the global technological stocks. The tech giant has signalled that it has benefitted from a spike in online activity thanks to the virus outbreak and lockdowns across the globe. But if the outbreak lasts into the second half of the year, it will probably be much harder hit as lockdowns will likely drive down demand for electronics and cause more of its production plants to shut down.

Economic releases for the day ahead include (all timings in GMT +8):

  • Germany Feb Factory Orders (2pm)
  • Canada Q1 Business Outlook Survey (BoC) (10.30pm)