Marknadsövervakning - 1st May 2020

Sterling was at the mercy of month-end flows, and as such pushed higher against the euro and dollar. There is a European holiday today so trading conditions will be thin.

The single currency was supported by positive pandemic news before the ECB interest rate decision. There was a slight change to monetary policy, which came in the form of a reduction of interest rates on the long-term loans, known as TLTRO. ECB President, Lagarde, was also at pains to point out that the ECB had a trillion euros worth of monetary support at its disposal, and that the ECB would be ‘flexible’. She may need to use it, as she suggested that Q2 GDP in the eurozone could fall by up to 12%.  

US jobless claims were 3.8 million, which totals to around 30 million jobs that have been lost in the past 6 weeks. US personal spending made its biggest drop in history, some 7.5%. There were some fast moves at the London fixing, which saw USD purchases against the JPY, and USD sales against the euro and pound. On a point of order, the Remdesivir drug being tested is not a vaccine, more akin to a drug that reduces the effects of Covid-19. We have US ISM manufacturing PMI for release today.

Even though the Australian PM Morrison has been talking about bringing forward consideration of relaxing restrictions to next Friday the AUD weakened.

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