Stock market volatility before the battery of economic data

Stock market volatility before the battery of economic data

Spanish Stock Exchange

Investors this week faced the reality of economic data of the Covid-19 pandemic And this Friday it is a new battery with PMIs in several countries and, above all, unemployment in the United States. Yesterday, the stock markets managed to end increases after a very volatile session in which they changed their sign several times and of which the Ibex 35 was the one that showed the worst behavior after knowing the unemployment figure for the month of March in Spain.

This Friday it is time to repeat. Volatility has been shown throughout the session, with markets shifting from red to black on numerous occasions. At 16 hours the selective spanish it rose 0.3% above 6,500 points, while the German dax recovered 0.1%, the Cac 40 yielded 0.7% and the Eurostoxx 50 0.2%.

But the focus of investors’ attention will be especially on the oil market, after the price of a barrel shot up almost 25% yesterday after a tweet from the president of the United States, Donald Trump, in which he announced that Saudi Arabia and Russia would be willing to park their price war and cut production by up to 15 million barrels. The benchmark Brent in Europe began the session with corrections of 4%, but at 9:30 a.m. it managed to turn the trend around and rose again above $ 30.

Today there has been a reaction to that advance by Trump and OPEC and the largest producers, including Russia, have called an extraordinary meeting for Monday that has shot the price up more than 10% to $ 33 a barrel.

© Provided by El Confidencial

Maria IgartuaThe president of the United States announces that it is possible for both countries to agree to cuts in the pumping of between 10 and 15 million barrels

In the debt market, the Spanish risk premium It rose to 114 basis points, with the yield on the 10-year bond at 0.69%. The Italian differential also advanced to 192 basis points.

Going back to the macroeconomic agenda, Today it is the publication in Europe and the US of the advanced indexes of activity in the service sector for March, the PMIs and the US non-manufacturing ISM, which from Link Securities expect “sharp falls, especially in countries that, like Italy and Spain, have practically paralyzed your activity”.

Thus, in Spain, there has been a historical collapse of the services sector. PMI fell to 23 points from February 52.1 with the most intense job destruction since the Great Recession, suggesting a high probability of a second-quarter contraction that exceeds that seen during the latest crisis, according to IHS Markit.

Another key indicator of the day was US unemployment, which has shown an increase in unemployment to 4.4% in the United States as a consequence of the COVID-19 pandemic.


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