News

US Indices Tumble as US Oil Prices Crash

Equities

Major US stock index futures tumbled as US oil futures fell to the negative territory for the first time in history. The weak demand for the commodity due to the coronavirus lockdown and limited storage capacity drove prices to the negative territory. The drop adds to the suffering of the oil and gas sector. Stock benchmarks lost gains earned on optimism over the virus outlook, where the Dow Jones Industrial Average futures fell to 23135, the S&P500 futures declined to 2772, and the Nasdaq futures dropped to 8601.

Oil

US oil prices for May delivery plunged to the negative territory for the first time in history due to a fall in demand and limited storage capacity. Traders holding oil were forced to pay to take it off their hands. However, the crude oil June contract, which is more active, hovered around $20 per barrel. Prices recovered slightly overnight as top oil producers expressed their willingness to cut production immediately instead of waiting till the 1st of May. However, the negative bias continues to rule, the May delivery which expires today fell below 0 again, the June contract is trading near $20 a barrel, and Brent June contract fell to $22.27.

USD

The dollar index, which measures the greenback against a basket of major currencies, edged higher to 100.27 as oil drop triggered the demand for safety. The EURUSD declined to $1.0819, the GBPUSD fell below $1.24 to $1.2386, and the USDCAD soared to 1.4213. Market participants are looking forward to fresh coronavirus developments to estimate their next move.

Gold

Gold prices recovered slightly from Friday's plunge supported by flight to safety. The price of a gold ounce rose to $1696 after trading at a low of $1671, the price of a silver ounce hovered near $15.25, while palladium futures declined to $2063.

Major Economic Events

GMT Country Event Expectation Previous

9:00

EZ

 German ZEW Economic Sentiment (Apr)

-42.7

-49.5

9:00

EZ

 German ZEW Current Conditions (Apr)

-77.5

-43.1

12:30

CA

 Core Retail Sales (MoM) (Feb)

0.3%

-0.1%

14:00

US

 Existing Home Sales (Mar)

5.30

5.77

20:30

US

 API Weekly Crude Oil Stock

-

13.143

Disclaimer 

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