Easter weekend with a difference – Update from the Investment Division

What has occurred since last Friday ?

This Easter weekend was quite different compared to other Easter weekends of the past. Even if our countries will be on the forefront to loosen the lock-down over the next months not much could be felt from any resurrection yet. At least the OPEC-countries and their allies including Russia agreed to reduce their oil production quotas.

Target is a decrease of ca. 10%, which is equal to a daily oil production of 9,7 million barrels. Analysts wrote on the weekend in the Financial Times that there is a demand shortfall of ca. 30% on the other hand due to the global virus containment measures. That reflects the size and impact of the crisis. But it is a beginning and the agreement was urgently needed to see at least some stabilization in that area. The oil price “stabilized” after the positive news in a trading range of USD 20-24 (West Texas Intermediate) and USD 31-33 (Brent Crude).

Equity markets opened this morning in Asia in a significantly positive area. Gold reached a new all-time high of US Dollar 1712 per gold ounce. EUR-USD is at 1,09.

What will we pay attention to over the next days and weeks?

To follow the epidemiological curves will continue to have the highest priority over the next days.  After the reopening of China, South Korea, Singapore and Japan also the first European countries with a controlled loosening.

A mapping based on the Asian countries will give an orientation. Furthermore the coming macro-economic data will offer important lessons about the extent of the crisis (also dramatically bad expected statistics can offer security).

The reports about the financial data of the first quarter, especially from US corporations, will not offer a complete picture but will give first impressions and will reduce uncertainty.

Our dossier on coronavirus with analyses: https://blog.en.erste-am.com/dossier/coronavirus/

^{Legal note:
Prognoses are no reliable indicator for future performance.}

 

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