ActivTrades’ Market Analysts prepared their daily commentary on traditional markets for April 28, 2020. This is not a trading advice. See details below:
FOREX
A day of mixed feelings in the financial markets with investors torn between the positive news that cases and fatalities are starting to come under control in the coronavirus main epicentres on one hand, and disappointing earnings and another bad day for oil on the other. It looks as though the glass half-full view is just about prevailing, with risk-related currencies edging ahead.
The euro is up about 0.1% against the dollar, while the pound is up against all majors as Covid-19 appears to be coming under control in the UK, with two consecutive days of drops in new cases and fatalities.
GBPUSD chart
Ricardo Evangelista – Senior Analyst, ActivTrades
OIL
The picture for oil investors remains bleak with the June WTI contract falling to $10 with attention already switching to the expiry of this contract with the painful memory of sharply negative prices when the May contract expired still fresh in the mind. Traders’ unwillingness to be caught with any barrels when the June contract expires also explains the strong contango with the June expiry trading at close to $10 on CME while the prices for July and October are 70% and 140% higher respectively. Moreover, investors are expecting demand to slowly recover in the third quarter of 2020, helping US tanks to avoid another “no vacancies” situation.
The trend is clearly bearish for Brent too but the scenario seems much more under control, with price just below $20. The possibility of transporting it and the specific characteristics of the underlying contract are making Brent much more resilient in the current storm.
Carlo Alberto De Casa – Chief analyst, ActivTrades
