Archives of “April 30, 2020” day

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White House economic advisor: Expects unemployment rate at 19%

  
  Analysis

That’s a little higher than expectations

White House economic advisor Hassett is on FOXNews saying:
  • expects April jobs report to show unemployment rate at around 19%
  • economy could potentially be turned right back on if coronavirus is under control soon
  • White House it should have better ideas soon if more stimulus for economy needed
The 19% level is a bit high compared to market expectations.   The meeting estimate as per Bloomberg is 16.3%. The average is 15.12% with a high estimate of 22%.
Does he know something or is he sandbagging hoping that the number is better, or does he not know.

European major indices close near session lows

  
Analysis, Global Indices

Early gains are erased

It is month-end and there has been pretty decent amount of volatility in the markets as London/European traders look to exit.
For the stock markets in Europe, they are ending the day/month at/or near the session lows. The final numbers are showing:
  • German DAX, -2.22%
  • France’s CAC, -2.12%
  • UK’s FTSE 100, -3.50%
  • Spain’s Ibex, -1.89%
  • Italy’s FTSE MIB, -2.09%
For the month, it was a rebound month for the major indices:
  • German DAX, +9.32%
  • France’s CAC, +4.0%
  • UK’s FTSE 100, +4.04%
  • Spain’s Ibex, +2.02%
  • Italy’s FTSE MIB, +3.75%

The gains this month are certainly welcome after the sharp declines year-to-date.  Even so, the major indices are still down sharply on the year:

  • German DAX, -18.02%
  • France’s CAC, -23.52%
  • UK’s FTSE 100, -21.76%
  • Spain’s Ibex, -27.51%
  • Italy’s FTSE MIB, -24.74%
Looking at the German DAX on the daily chart, the price high today was the highest level going back to the gap lower on March 6/9.  The price also moved above the 50% retracement of the move down from the February high yesterday.  However that break of the midpoint level could not be sustained and the price is closing below the 50% level.

ECB Lagarde Press conference highlights from prepared remarks

  
  Analysis

Lagarde highlights from ECB press conference

  • recovery speed and scale remain highly uncertain
  • policy helps support flow of credit to companies
  • welcomes government measures
  • continued ambitious efforts needed
  • Euro area economy could shrink by as much as a 12% in 2020
  • Announces new PELTROs  or non-targeted pandemic emergency longer-term refinancing operations in an effort to support liquidity conditions in the euro area financial system and contribute to preserving the smooth functioning of money markets by providing and if effective liquidity backstop
  • ECB expects to keep the main refinancing operation and the interest rates on marginal lending rate facility and the deposit facility at present levels or lower levels until it has seen the inflation outlook robustly converts to a level of sufficiently close to but below 2%
  • ensuring monetary policy transmitted to all countries
  • ECB is ready to adjust all instruments by as much as necessary and as long as necessary
  • pandemic severely affected manufacturing, services
  • economic impact likely to even be more severe in 2nd quarter
  • growth expected to resume as containment is lifted
  • duration epidemic highly uncertain
  • ECB prepared to extend PEPP for as long as needed
  • Euro area GDP can fall by -5% to  as low as -12%
  • expects headline inflation to drop considerably in coming months
  • virus implications for longer-term inflation highly uncertain
  • him coordinate fiscal stance is critical
  • longer-term inflation expectations less affected
  • more favorable TLTRO3 terms should encourage lending
In the debt market , the Italian and Spanish bond yields have moved lower,with 2 year yields down by 15 basis points to 0.47% in Italy. That is the lowest in over 3 weeks. In Spain, the 10 year yield touches 0.74%. Which is the lowest rate since April 7.

China says that it stands ready to discuss ‘fast track’ entry with other nations

  
  Analysis
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China is beginning to allow business travel into the country

South Korea is the first on the list to be granted allowance in this regard, but it will only apply to five Chinese cities and provinces for now. China did however note that South Korean firms must apply for ‘fast track’ entry to be considered.

It isn’t exactly a massive relaxing of border restrictions per se but it is a start I guess.
That said, if two-week quarantines to and from every country remain mandatory, I can imagine this being more hassle than it is actually helpful.

Germany April unemployment change 373.0k vs 74.5k expected

  
  Analysis

Latest data released by the Federal Employment Agency – 30 April 2020

  • Prior 1.0k
  • Unemployment rate 5.8% vs 5.2% expected
  • Prior 5.0%
That’s a blowout number as we see the total unemployment in the country rise to 2.64 million from 2.27 million on a seasonally adjusted basis.
The labour office notes that registrations for short-time work scheme are at a level never seen before, adding that demand from companies for new employees has ‘completely collapsed’.

US President Trump interview: Trade deal with China has been upset very badly

  
Analysis, Politics
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Trump interview with Reuters

  • says China “will do anything they can to have me lose” 2020 election
  • says looking at different options in terms of consequences for China for its handling of coronavirus crisis, says I can do a lot
  • says trade deal with China has been “upset very badly” by the coronavirus
  • says South Korea has agreed to pay united states a lot of money for defense cooperation
  • says he does not see 2020 election as a referendum on his handling of virus
  • says does not believe polls showing Biden ahead
Main points summary via Reuters.
The comments on possible retaliation against China do not read as encouraging for further trade talks. AUD down a few tics.
Trump interview with Reuters 
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