Equities: Global equity markets are extending on their gains with US equity futures rising over 1%. As New Zealand announced that it will unwind its lockdown measures, it is becoming more and more evident that the impact of the coronavirus may have passed its peak. As such, with governments and central banks also propping up their economies there is seemingly a lack of enticement for bearish market participants. The absence of a notably negative catalyst could see market sentiment continue to improve.
Commodities: Oil prices are once again stealing the headlines given that front-month futures remain volatile. Today we looked at[3] whether oil prices could go negative again. That said, there has also been a notably limited response to the precipitous fall in WTI front month futures with commodity currencies holding steady.
Currencies: Broad-based Dollar selling has been the main theme across the FX space. Easing concerns over a USD[4] shortage has been among the key factors behind the pullback with the US Dollar 3-month libor continuing to head lower. USD/JPY[5] made a firm break below the 107.00 handle to trade at its lowest level since mid-March. Elsewhere, EUR/USD[6] is back to its 1-week peak of 1.0885, which we see as a key inflection point in the pair where a sustained may see a reassessment of the near-term bearish outlook.
Aside from Dollar weakness, the New Zealand Dollar[7] has been among the underperformers after a local bank announced expectations that the RBNZ will go negative on interest rates. This is a tool that the Governor recently stated was on the table and thus keeps
