US futures and European equity markets are trading lower as traders react to economic numbers. The UK’s retail sales number plunged today and came well below the expected reading. The theme was similar for the European services and manufacturing PMI data released yesterday.
The US jobless claims data also confirmed that there are over 26 million people without any job because of the shutdown in the country. Traders hold deep concerns about the upcoming US core durable data that is due later today, the forecast is for -6.1%
The sentiment took another hit after the report confirmed that Gilead Science’s medicine has failed to improve patients’ conditions yesterday. Gilead confirmed that it stopped its study because of low enrollment and the company was unable to conclude anything meaningful.
On the fiscal front, the US House of Representatives passed the small business loan bill of $484 billion yesterday. The bill is mainly designed to save jobs in the small business sector. In total, the US government has allocated the coronavirus spending of nearly $3 trillion.
Back in the UK, investors are hoping that the government will announce some measures to ease the lockdown. Boris Jonson is expected to return to Downing Street next week and easing the lockdown measures remain the main priority for the government. The UK’s retail sales data released today—actual -5.1% forecast -4.5% has printed another set of horrible reading. It confirms the government needs to ease some of the lockdown measures to save the small to medium businesses.
As for the oil market, WTI West Texas Crude Oil is trading higher by 2% today and the price does look somewhat steady. However, there are still concerns that the rally that we have experienced is only a dead-cat bounce. Speaking from a fundamental perspective, nothing has changed in terms of supply and demand, and it will be a surprise if we do not see the price falling again next week.
The precious metal is holding on to its gains after the dismal US weekly jobless claim data. The price is still trading above the critical level of 1,700 and as long as the price stays above this level, the door is open for more upward swings.