Market News & Analysis
Easing Optimism Boosts Markets
Fiona Cincotta May 5, 2020 7:21 AM
The rebound in oil has been largely driven by an increase in demand as governments ease lockdown restrictions. Data from the Cushing storage (largest oil storage tank in the world, responsible for 13% of total US storage) showed inventories rose 1.88mb last week, the smallest increase since mid-March and the surest indication that oil demand is slowly picking up.
Attention will now turn to tomorrow’s API data and then EIA data, which could well confirm that a gradual recovery is underway.
Service sector PMI bottom
The pound is pushing higher, snapping a three-day losing streak against the Dollar as the number of coronavirus daily deaths fall to levels last seen at the end of March as the UK awaits further details on the UK’s exit strategy.
Today the service sector PMI is expected to drop to 12.2 in April (final), reflecting a full month of lockdown. The very measures implemented to slow the spread of covid-19 caused services sector demand to evaporate. With the UK economy set to gradually reopen this should represent a bottom. With the market expecting a horrifying number, its unlikely to rock the boat much at these levels. A significantly worse reading (if possible?!) could.
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