![(05 MAY 2020)DAILY MARKET BRIEF 2:oil recovers for 5th straight day. (05 MAY 2020)DAILY MARKET BRIEF 2:oil recovers for 5th straight day.](https://c.mql5.com/6/861/splash-736306.jpg)
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The Swiss consumer prices have certainly retreated 0.8% y-o-y in April, as a result of a broad shut down in shops and restaurants. The Swiss franc remains strong against the greenback, which shows signs of consolidation amid last week’s sell-off. But the souring market mood gives support to safe-haven currencies, which also benefits to the Japanese yen.
The factory-gate prices in the Eurozone should confirm a 2.6% y-o-y decline in March as a result of subdued activity as countries limited activities to fight the virus. The EURUSD remains bid below the 1.09 mark, hinting that the potential for an attempt to 1.10 is building stronger against the US dollar. Offers should be found near the 100-day moving average (1.0975) and the 200-day moving average (1.1020).
Across the Channel, the pound remains offered below the 1.25 mark against the greenback. The final services PMI data should confirm the most dramatic slump on record and increase the selling pressure on sterling ahead of Thursday’s monetary policy meeting. The Bank of England (BoE) is expected to maintain its interest rates and the asset purchases program unchanged, but investors know that the bank stands ready to do more if needed.
What Sterling investors will be watching is the government’s plans to start reopening businesses later this week. We expect that the lockdown in the UK will likely be extended toward the first week of June and continue taking a toll on the service-heavy British economy for another full month. On the other hand, the clock is ticking louder towards June 2nd when, in the dearth of a progress in the EU trade deal negotiations, Britain will start preparations for a no-deal Brexit. We see little chance of any development on this end, as governments are too busy dealing with the coronavirus crisis.
So, with a historical economic recession underway, topped by an almost certain no-deal Brexit, the medium to long-term outlook for the pound remains negative. Price advances should present interesting selling opportunities. The key resistance lies at the 1.2685/1.2740 range, the 100 and 200-day moving averages, respectively.
Equities were better bid in Sydney (+1.31%) and in Hong Kong (+0.85%), as Japan, China and South Korea remained closed for holidays.
Activity on FTSE futures hint that the British stocks are preparing for a positive start as oil trades higher on a fifth straight session. WTI crude tested the $22 a barrel. Moving forward, the rising tensions between the US and China, added to an already shattered global demand, will certainly limit the upside potential and maintain prices in the negative trend. Offers are eyed at $23/25 area.By Ipek Ozkardeskaya