US Open – Markets, UK GDP, Oil, Gold, Bitcoin

Mixed Feelings on Lockdown Easing

The stock market rebound is running on fumes, it seems, as investors come to terms with the reality of what easing lockdown measures actually means.

We’ve all heard of the dreaded second wave for some time. It’s why politicians everywhere have been repeatedly stressing the importance of patience, in regards to abiding by and easing lockdown measures. I’m just not sure people really expected the risk to appear so soon, before many countries had started to emerge from the first lockdown.

It’s worth stressing that it’s still very early days and new cases that are emerging are just an expected increase that comes from such action, rather than a spike that warrants further restrictions. Either way, it certainly appears to have taken its toll on stock markets. At a time when so many are wondering why they’re so disconnected from the reality of severe recessions and huge uncertainty, perhaps that’s not such a bad thing.

UK GDP a reminder of the cost of lockdown

The UK is in the process of easing restrictions this week, with new rules around exercise, and leisure coming into force today, a move that has been met with mixed feelings unsurprisingly. The odds of broad agreement in these unprecedented time are slim to none. The timing of the GDP data this morning is therefore a timely reminder of the damage the lockdown is having and it was only in place for the final week of March.

And already the stories are starting to emerge regarding how the government plans to pay for all of this economic support, estimated to be £300 billion this year, with reports of tax hikes, freezes to pay and more. The end of austerity didn’t last very long.

Hesitancy potentially creeping in ahead of WTI expiry

Oil prices are a little flat today. Less than a week to go until the June contract expiry and perhaps it’s making traders a little nervous and more hesitate about joining the great rebound. A repeat of last month looks unlikely at this point but then, did it this time a month ago? It will be interesting to see how this unfolds.

Nothing new to report on gold

I’m tempted to copy and paste my gold comments from a day or two ago as there’s very little different to report. Gold is currenly trading slightly above $1,700 rather than slightly below which is progress, I guess. Nothing has fundamentally changed though and consolidation is still clear for all to see. Perhaps given the tight ranges, a breakout is almost upon us but maybe that’s more a case of me wishing for it than anything else.

Bitcoin settled in middle of halving hype range

Bitcoin is trading in the middle of its halving hype range, sitting around $9,000 this morning. There isn’t too much to discuss on this at the moment. The lower end of this range arguably looks the more vulnerable but that’s not clear right now and it may simply settle into this $8,000-10,000 range for a while.

For a look at all of today’s economic events, check out our economic calendar.

This article was written by Craig Erlam Senior Currency Analyst at OANDA.

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