A mixed start to trading in Europe, where Wall Street was poised for a similar open as investors mull over the reopening of various economies around the world at a time when others are seeing early signs of another wave forming.
Nothing removes the shine of easing closure measures like previous success stories that see fresh spikes in the number of cases. The numbers are still very small, but that’s how these things start. The news may come at a good time for investors, with many people questioning whether the stock market truly reflects the magnitude of the situation we all face.
As we saw on Monday, trumps are almost always bad. Reports that parts of New York are ready to reopen with other regions not long after have triggered a late wave on Wall Street, and I would be surprised if we do not continue to see this trend continue. Should the second wave change in another shutdown, investors are not so forgiving. That would be a disaster.
During a week like this, the COVID narrative is likely to dominate the market sentiment. Central banks are likely to take a breather this week, while U.S. business in the US has largely now reported the first quarter. The information is mainly given a free pass, but even this is missing today.
Oil higher, but caution may start before the end of June next week
Oil does enjoy some relaxation, relatively speaking. It has been a wild couple of months, but we are now seeing widespread action by producers to close the huge gap between supply and demand. This comes at a good time as easing measures have been eased, which has allowed prices to recover well from lows last month, albeit back to unsustainable levels.
That said, this may just be the calm before the storm. The next contract was due to expire next week, and this time around we were also trading around those levels, unaware of the carnage the following week was waiting. Of course, a lot has changed since then, but it may not completely clear the nerves. It has been a good run for oil, but we can see some profit going ahead next week’s expiry.
Gold consolidation goes on and on and on and on and on …
Gold continues to float around the $ 1,700 level. The area is gradually closing down, but there is not much to indicate that we are on the verge of an explosive outbreak. The dollar is also rangebound, which probably plays a big role in the price action we see in the yellow metal. If the dollar finds its way below the April lows – less than 2% below its current levels – gold could possibly start higher. However, it does not occur in any hurry.
The Bitcoin price survives the halfway event
Bitcoin halving has come and gone and, as expected, advertising the event has given the price a shock. The question is whether it can be maintained. During the up to half the price supported approx. $ 8,000 and held. A break from this could have seen bitcoin back in early April levels within a long time, wiping out the halving gains. It is promising for bitcoin bulls. The flip side is that $ 10,000 was also held, so the battlefield is now set. It could be an interesting couple of weeks.