Archives of “April 10, 2020” day

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Reminder: G20 energy ministers meeting scheduled to start at 1200 GMT

  
  Analysis

Oil headlines will be the main thing to watch today

Oil

The latest development from yesterday was that Mexico is playing hard ball and that is currently threatening the OPEC+ proposal put forward ahead of the meeting later.
OPEC+ members have called for international producers to rally on their side but at this stage, there’s no real certainty about what could happen next given the twist yesterday.
Either way, don’t expect any output cuts agreed to compensate for the loss of demand due to the economic shutdowns globally at the moment.
Whatever we are seeing will just help to ease the bleeding but the longer the global economic situation continues in this fashion, the weight of the supply glut will continue to grow heavier for oil prices. WTI crude fell by 9% yesterday, closing near the lows at $22.76.

The final statement from the OPEC+ meeting yesterday

  
Analysis, Crude

OPEC+

Some key points to take note of from the statement above:
  • Proposal is to cut oil output by 10 mil bpd for 2 months (1 May to 30 June)
  • Subsequently, oil output cut will be 8 mil bpd for 6 months (1 July to 31 December)
  • After, oil output cut will be 6 mil bpd for 16 months (1 January 2021 to 30 April 2020)
  • Baseline for adjustments will be from October 2018 production levels
  • Except for Russia and Saudi, baseline will be from 11.0 mil bpd production level
  • Agreement is conditional on the consent of Mexico
  • Calls upon other major producers to contribute as well

The stock market shrugs off another 6M job losses, but off highs

  
Analysis, US Market

Dow close that highest level since March 10

The major stock indices shrugged off another 6 million job losses and closed higher, but the indices are off highs for the day.  The major indices now have 2 day win streak. The Dow closed at the highest level since March 10.

The final numbers are showing:

  • S&P index up 39.84 points or 1.45% at 2789.82
  • Nasdaq index up 62.67 points or 0.77% at 8153.57
  • Dow index rose 285 points or 1.22% at 23719.33.
The S&P index did move above its 50% retracement level at 2792.69, but is closing back below that level at the close.
The good news is the
  • rise this week was the largest since 1974.
  • The NASDAQ and back-to-back gains for the 1st time since March 2
  • the Dow adjuster average rose by nearly 13% in the shortened trading week
Tomorrow the bond and stock market will be closed in observance of Good Friday.  That will be weird with coronavirus news and follow through from OPEC still in play.

Eurogroup reaches deal – report

  
  Analysis

Some more late good news

Tony Connelly from RTE reports that a deal has been reached in the eurogroup meeting.
Eurogroup There were reports about deep rifts between the north and south. This is a big turnaroud. The details are important though, they could have a ‘deal’ on some token measures.
Update from Tony: EU finance ministers have reached agreement on a European rescue plan. The ESM element has been agreed, the European Commission’s SURE package, mobilising up to 100bn has been agreed, + the EIB pan European guarantee scheme has been agreed. Work to begin on a “recovery” fund, subject to “guidance” by EU leaders, possibly some kind of coronabond or “solidarity” fund by another name.
These numbers are smaller than hinted (hoped?) earlier.
More: Figures on Eurozone breakthrough: €240 bn for ESM enhanced conditions credit lines; €100 bn for SURE work subsidy plan; €25 bn for EIB cheap loans for corporate sector, leveraged up to €200 bn – source n terms of ESM conditionality, the enhanced conditions credit lines ECCLs will focus on COVID 19 expenditure and will end when crisis over. Terms to be agreed by ESM governing bodies.
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