Crude oil price rises ahead of Trump meeting with oil executives
US stocks fell yesterday after Donald Trump sent a dark message to Americans. On Tuesday, the president raised the expected death toll related to COVID-19 to between 100k and 250k. This was a bigger number than was originally expected. Additionally, investors are worried that the impact of the disease to the economy will be higher. For example, yesterday, Florida issued a state-wide limit on movement to prevent the spread of the disease. This is after the number of cases jumped from less than 100 in the beginning of March to more than 7,000 yesterday. At the same time, there is a sense that the $2.2 trillion stimulus package passed a week ago will not be enough. The Dow Jones and S&P dropped by more than 4%.
The price of crude oil rose slightly ahead of a meeting between Donald Trump and oil executives. The meeting will feature CEOs of major oil companies like Exxon, Chevron, and Continental Resources. The leaders will seek Trump’s intervention to stabilize the oil market. Trump has several items in his toolbox. For example, he can talk directly to Mohammed bin Salman and ask him to stabilize oil markets. Alternatively, he can start hostilities with the kingdom by imposing sanctions or by removing the security the US provides to the country. This is happening at a time when onshore oil storage facilities are getting full and tankers full with oil are lacking a place to go.
The biggest story today will be on US jobless claims. The market will focus on the number of claims that were filed last week as it seeks to understand the impact of the disease. Economists polled by Refinitiv expect the number of claims to come at about 3.5 million. Those at Goldman Sachs and Citi predict that the number of claims will increase by between 5 million and 6.5 million. These numbers will come a day ahead of the official employment data from the Labour Department. They will also come a day after a report by ADP showed that more than 27k people were removed from payrolls in March.
The EUR/USD pair declined from the yesterday’s high of 1.1040 to an intraday low of 1.0930. On the hourly chart, the price is slightly below the 61.8% Fibonacci Retracement level and along the 21-day and 14-day exponential moving averages. The amount of volatility as measured by the average true range and Bollinger Bands has eased a bit. This means that the pair could see some significant movements either today or tomorrow depending on the US jobs numbers.
The XBR/USD pair rose to an intraday high of 26.54 as the markets waited for a meeting between Trump and oil executives. This price is substantially higher than yesterday’s low of 25.11. The price is slightly above the 14-day and 28-day exponential moving averages while the RSI has moved from below 30 to the current level of 68. The signal and histogram line of the MACD has also moved above the centreline. The pair may move higher ahead of the meeting.
The S&P500 CFDs declined to an intraday low of $2,475 as market participants started to worry about the impact of COVID-19. On the four-hour chart, we see that the index attempt to recover from its YTD low of $2,170 hit a roadblock at about $2,633. The index is trading below the short and medium-term moving averages while the RSI has been falling. The index may continue moving lower on weak sentiment in the market.