Negative Sentiment Dominates As Economic Recovery Distant
Fiona Cincotta May 14, 2020 7:35 AM
A dose of reality from Federal Reserve Chair Jerome Powell overnight has brought stocks crashing lower.
A dose of reality from Federal Reserve Chair Jerome Powell overnight has brought stocks crashing lower. Wall Street closed in the red, with losses spilling over into Asia, and Europe is unsurprisingly looking to open on the back foot, adding to yesterday’s losses.
The rise of risk aversion and the adoption of a risk off strategy is boosting gold this week. The traditional safe haven is back in demand as dark clouds gather on the horizon and the economic recovery starts to look distant. The precious metal is on the rise for the third straight session, trading at a two-week high.
Oil is on the rise, recouping some of the losses from the previous session. Despite an encouraging EIA report which revealed that US stockpiles unexpectedly dropped by 745,000 vs exp. 3.8 million barrels oil still ended the day -1.9% lower. This was the first decline in oil inventories since January, making it a significant sign that energy consumption is on the rise.
Initial jobless claims will be under the spotlight layer today. Claims have fast become one of the most closely monitored data points given its timely insight into the US economy’s health as coronavirus batters the US labour market.
FTSE levels to watch:
The FTSE closed -1.5% lower yesterday and is looking at another step lower today. The index slipped through its ascending trend line support.
Immediate support can be seen at 5800 (low 6th May) prior to 5660 (low 3rd May) and 5530 (low 15th April).
Immediate resistance is at 5900 (trendline support turned resistance) prior to 6000 (psychological level)
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