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India to stock up on strategic oil reserves to take advantage of low prices – report

Bloomberg reports, citing officials with knowledge of the matter

  • India is set to snap up millions of barrels of Middle East crude
  • The purchases are in line with global efforts to stabilise energy markets
  • This comes after Indian oil minister spoke to US, Saudi counterparts
The sources also say that the finance ministry has already approved the request and that India is seeking to buy around 5.5 million barrels from the UAE and about 9.2 million barrels from Saudi Arabia, with some additional purchases from Iraq.
The report notes that India has space for an additional 15 million barrels of crude currently. For some context, India is the world’s third biggest oil consumer – after the US and China.
Oil isn’t really moving on the report as prices are still up by just over 3% on the day at around $24.40 now. That is closer to the lows for the day though, after a fall from around $25.20 at the start of the European morning.

S&P cut Australia to AAA negative

S&P cut Australia outlook to negative from stable

Rating is AAA still.
This is not wholly unexpected from S&P
AUD down a few pips on the announcement
S&P cite:
  • reflects substantial deterioration of Australia’s fiscal headroom
More:
  • large Australian budget deficits likely to be temporary
  • virus a severe economic c and fiscal shock
  • government deficit to average 7.5% of GDP in 20/21
  • annual growth to fall to 1.3% in FY 2020

Will China lower its GDP target, or even scrap it altogether?

Comments late in March from People’s Bank of China adviser Ma Jun expressed wariness of setting a target:

  • setting GDP target may force China to resort to flood-like stimulus
  • GDP growth between 4 to 5% will be difficult to achieve for China

Bloomberg have a follow-up piece

  • The coronavirus shock has influential Chinese economists and officials engaging in a previously unimaginable debate: should Beijing drastically reduce its economic growth target or even abandon it altogether?

The GDP target is usually set at the annual parliament meeting in March, which was delayed due to coronavirus.

A date for the National People’s Congress has still not been set, allowing for specuatliotn that perhaps there will be no GDP target this year.

Goldman Sachs analyst on downside risk for US equities

Goldman Sachs’s chief equity strategist, David Kostin spoke Tuesday with CNBC

  • “There’s a little bit of asymmetry in terms of the downside risk toward a level in the S&P 500 of around 2,000, which is down almost 25%, and upside of around 10% to a target at the end of the year of 3,000”
Unpicking/deciphering that – he thinks lower is more likely.
More:
  • important investors not get too keen to buy
  • during the 2008 financial crisis the market took several months of violent moves up and down before ultimately putting in a lasting bottoming on March 9, 2009
  • “I would just remind you that in 2008 in the fourth quarter there were many different rallies…but the market did not bottom until March of 2009” 

EU top scientist resigned: “extremely disappointed by European response to Covid-19”

President of the European Research Council Professor Mauro Ferrari resigned on Tuesday

  • “I have been extremely disappointed by the European response to Covid-19”
  • He developed a plan for a response ….  “The proposal was passed on to different layers of European Commission administration, where I believe it disintegrated upon impact.”
Janez Lenarcic, the EU’s crisis management commissioner:
  • member states had initially not offered the help needed by Italy as the death toll there soared
  • “There was an inadequate response to the Italian request for assistance from other EU member states,” he told reporters in Brussels on Tuesday, as he unveiled a plan to dispatch doctors and nurses from Romania and Norway to Italy. “But things have changed now.”

UK PM spokesman: Boris Johnson has not been diagnosed with pneumonia

Comments by UK PM spokesman, James Slack

  • Johnson was stable overnight and remains in good spirits
  • Johnson is not on ventilator, is receiving oxygen
  • Government has a clear plan to respond to coronavirus
  • Cabinet is working to implement it
  • Downing Street remains fully operational
  • Expects there to be an update on Johnson’s condition later today
The headlines have helped to give the pound a little nudge with cable rising to a high of 1.2358 before backing off a little to 1.2330 levels currently. So far, they are managing to alleviate fears surrounding Johnson’s hospitalisation and that is helping to calm the market.