Markets down ahead of weekly US jobless report - 22.5.2020

The Dollar strengthening has resumed today ahead of report expected to show nearly 40 million Americans likely sought unemployment benefits over the last nine weeks. The live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, lost 0.4% Wednesday as minutes of the Fed’s April policy meeting showed officials discussed how to convince markets that interest rates will stay low for a long time. EUR/USD continued climbing yesterday while GBP/USD’s slipped as euro-zone April inflation was revised down to 0.3% from an initial estimate of 0.4% and UK’s consumer price index tumbled to just 0.8% year-on-year in April, down from 1.5% in March. Both pairs are lower currently. AUD/USD continued rising yesterday while USD/JPY turned lower with the dynamics reversed for the two pairs currently.

Futures on three main US stock indexes are down after a surge on Wednesday. The earnings season continues with companies including Home Depot, McDonalds and Blackrock scheduled to report quarterly results today. Stock indexes in US ended sharply higher on Wednesday: the three main US stock indexes recorded gains ranging from 1.5% to 2.1% led by technology shares. European stock indexes are down currently after a rebound Wednesday. Asian indexes are mostly lower today after Japan reported its April exports plummeted nearly 22% while imports tumbled 7%, the worst monthly readings in more than a decade for the world’s third largest economy. Shanghai Composite lost 0.6% against the background of a passage of US Senate bill to delist Chinese companies on US exchanges while China’s National People’s Congress meets today.

Brent rally continues today following the US Energy Information Administration report Wednesday that US crude oil inventories fell 5 million barrels last week, the second weekly decline after 15 consecutive increases. The US oil benchmark West Texas Intermediate (WTI) futures rose yesterday as the EIA reported that domestic oil output fell by 100,000 barrels a day to 11.5 million barrels a day last week: June WTI jumped 4.8% and is rising currently. July Brent crude closed 3.2% higher at $35.75 a barrel on Wednesday.