Marknadsövervakning - 15th May 2020
With a risk-off market, the pound was on the back foot against the US dollar. BoE Governor Bailey spoke in the morning and ruled out the implementation of negative interest rates.
Swiss April producer and import prices kicked the day off with a decline of 1.3% rather than 0.3% expected. The EU's Breton spoke of their desire to save the tourism season. Germany's April final CPI was slightly higher at 0.9% rather than the initial 0.8%. German GDP is due out today and expected to show the largest decline since 2009.
President Trump said he liked the strong dollar and Fed Chair Powell was his "most improved player". Following on he asked for negative interest rates and also said that he was "very disappointed" with China. The jobless claims were worse than expected at 2.8 million, and it is now the case that 36 million jobs have been lost since the start of the pandemic. However, apparently 90% of those workers have been told they could return to their job, when possible. Press and anecdotal reports suggest that the lifting of lockdown measures in line with government guidelines is being widely ignored. We conclude that if this continues, there will be a second spike in the pandemic.
In a risk-off market, it was difficult for the AUD to hold on and it slipped lower against the dollar. The ZAR struggled even more as President Ramaphosa delivered a speech, which continued the lockdown. This leaves the economy in dire straits and losing jobs rapidly. As such, USD/ZAR lost 1% against the dollar.