April 2020 - Page 41 of 44 - Financial Occultist

Bloomberg with the headlines, citing an OPEC+ delegate on the matter

OPEC+ wants global oil producers meeting as soon as possible
OPEC+ encouraging other producers to join the meeting

The only thing we know for sure is that the virtual meeting is almost certainly going to take place next Monday. There are not much details of who will be participating, not even Russia at this stage let alone other producers such as the US, Canada or even Mexico.

There have been many whispers doing the rounds on what propositions they may be discussing but the range seems to be from around 6 mil bpd to 10 mil bpd worth of cuts – depending on who you ask that is.

Saudi sources are leaning towards being more conservative but other reports so far are suggesting a bigger chunk of output cuts that is to be discussed.

Meanwhile, Russia is also said to be only willing to join if the US contributes. So, make what you will of that speculative information.

For now, all this huffing and puffing is underpinning oil prices as we see oil turn around a 4% loss in Asia Pacific trading to a 4% gain now – rising from $23.70 to $26.40.

Malaysia cuts its GDP forecast range to -2 to +0.5%

03-Apr-20 07:57 am

Anirudh Sethi

Central Bank of Malaya (Bank Negara Tanah Melayu)

says 2020 headline inflation to average between -1.5% and 0.5% (0.7% in 2019)
2020 GDP growth to be between -2% and 0.5% amid coronavirus outbreak, low oil prices (2019 pace was 4.3%)
says it could utilise policy levers as appropriate to cushion impact of economic downturn
monetary policy considerations remain guided by evolving downside risks to growth, price stability
will ensure enough liquidity in foreign exchange, bond and money markets for uninterrupted financial intermediation
will work to avoid excessive volatility in exchange rate
economy expected to normalise in 2021 in line with projected global recovery

Malaysia has been very quick with a fiscal response, circa 10% of GDP.

Companies in the S&P 500 re-purchased $5.3 trillion of their own shares from 2010 through 2019

03-Apr-20 06:27 am

Anirudh Sethi

World Bank approves USD 1 billion emergency financing for India to fight #COVID19 pandemic in the country.

03-Apr-20 06:08 am

Analysis

Anirudh Sethi

Trump Administration Expected to Recommend Wearing Cloth Masks

03-Apr-20 05:37 am

Analysis

Anirudh Sethi

S&P affirms US rating at AA+, outlook stable

03-Apr-20 05:32 am

Analysis

Anirudh Sethi

Is there a “too big to downgrade” rating?

Especially in the current global predicament

S&P ratings

US rating is constrained by high government debt and fiscal deficits, both are likely to worsen this year after the coronavirus shock

‘likely’ to worsen??? Nothing unlikely about it.

More:

expect US economic recovery in 2021, which will partly compensate for loss of output this year, then continued GDP growth afterwards
expects general government deficit to fal;l below 5% of GDP by 2022
expects the US economy to contract around 1.3% in 2020
recovering by 3.2% in 2021
2.5% in 2022

Friday will bring nonfarm payroll data from the US – Goldman Sachs preview

03-Apr-20 05:31 am

Analysis

Anirudh Sethi

Goldman Sachs were very close to the money indeed for jobless claims.

I posted yesterday:

US Jobless claims data due Thursday – Goldman Sachs forecasts 5.25m

And then, prior to the data they boosted their forecast:

Goldman Sachs raises US weekly initial jobless claims forecast to 6 million, from 5.25 million previously

Note that this NFP report is unlikely to be instructive, the survey was mainly before the big impact of the coronavirus outbreak on the economy. Over to GS’ comments:

estimate for nonfarm payrolls is a decline of 180k in March
unemployment rate up 0.3 to 3.8% … risks skewed towards a larger increase
the March employment numbers are already fairly stale and insignificant in our view, because the April report will likely show job losses in the millions.