Morning Minutes 4/8/2020

Morning Minutes

Markets Remain Volatile Amid Ongoing Political Talks

April 8, 2020

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Market Commentary By:
Colin Cieszynski, CFA, CMT
Chief Market Strategist
ccieszynski@siawm.com
+1 (647) 282-4428

The market rally which started the week came to an abrupt halt yesterday with US markets reversing course and giving up significant early gains to finish slightly in the red. Indecision among investors has continued overnight and into this morning. Asia Pacific markets were mixed with Tokyo gaining 2.1% and Hong Kong losing 1.1%. US index futures and European bourses are also mixed. US index futures are trying to bounce back this morning with Dow futures up about 235 points or 1.0%. European markets are seeing moderate losses of 1.3% for Paris, to 1.0% for London, to 0.6% for Milan and Frankfurt.

Indecisive investors appear to be taking their cue from indecisive politicians. European finance ministers have been unable to agree upon a fiscal support package amid disputes over budget conditions and whether or not to allow the issuance of common pandemic bonds. Meanwhile, tomorrow’s scheduled videoconference between OPEC, Russia and others is apparently still on but it remains unclear whether a deal can be reached or not and its also unclear if a reluctant US may need to participate in some way to get a deal over the finish line.

Capital flows between currencies are mixed today. The US Dollar is up 0.4% against Gold (which has dropped back under $1,700/oz), and up 0.15% against the Euro and the Yen. The greenback is down 0.2% against the Pound. Crude oil is up today with WTI gaining 1.4% toward $24.00/bbl and Brent rising 0.5%.

The Canadian Dollar is down 0.2% against the US Dollar today on mixed housing numbers. Annualized housing starts for March came in at 195K, which was down from 210K in February, but not as bad as the 180K investors had been expecting. Building permits for February, however, fell by 7.3%, which was worse than the 4.5% decline the street had been expecting.

 

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