FOREX TRADING STRATEGY APR 20 - FLATTENING

Apr 20, 2020
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Now the world is better at dealing with the outbreak, let's check how the markes react to that. Take a look at the latest news on Monday and choose a proper trading strategy.

Being flattened

The virus outbreak in New York may have started to subside as the rate of new infection and death in this small ice has slowed. On Sunday, Governor Andrew Cuomo said: "New York seems to have passed the peak of the outbreak." The number of deaths in the United States reaches 40,000. It may take several days before a new US aid agreement for small businesses is released. 

The first signs of easing appeared in Europe when Italy, Spain and France reported the lowest increase in the number of deaths during the week. Germany is leaving shops, car dealerships, bike shops and bookstores open on Monday. However, World Health Organization Director - General Tedros Adhanom Ghebreyesus said: "The social restrictions imposed to prevent the virus must be relaxed in stages and should not be assumed that the epidemic has ended. " Singapore currently has the most cases of coronavirus infection in Southeast Asia, surpassing Indonesia after the state discovered hundreds of patients among foreign workers with low incomes.

The market is back

The US futures market slumped in early trading on Monday as investors headed for a busy week for corporate earnings reports, amid signs of coronavirus spread. Global has diminished. The money market started the week with a bit of bustle and Asian stocks are heading to a rather chaotic start when the coronavirus pandemic has shown signs of subsiding in some important hot spots in the world. The dollar and Treasury Bond stabilized when New York Governor Andrew Cuomo said the state may have surpassed coronavirus deaths. Oil fell to its lowest level in 18 years after production cuts agreed by top producers last week did not seem to save the devastating collapse in demand caused by Covid-19. On Friday, US stocks posted a second straight week of gains while Treasury bonds slumped, with 10-year bond yields rising 2 basis points. Meanwhile, the income-reporting season will give investors a glimpse into the impact of the pandemic on businesses. IBM, Infosys and China Mobile will release earnings reports on Monday, followed by Coca-Cola and Netflix.

A rescue

A historic change in Australia's current account - from a long-standing gap to a source of strength - could prove to be just enough to save the nation's top credit rating from a budget loss. Australia recorded its first current account surplus after 44 years in the second quarter of 2019 and remained positive for the next two quarters. There are signs that it is still close to the balance and can help prevent downgrade when S&P Global has acknowledged cutting Australia's AAA credit rating outlook this month. Current account returns to surplus compared to last year as a function of increasing resource revenue and an uptrend in service exports that will help strengthen the trade balance.

Forbid in currency trading

The coronavirus economy is breaking records in government borrowing and central bank lending. Soon, it can also smash the taboos required to separate those two things. The government that pays its budget with loans from its own central banks is called monetary financing. But the repetitive risk in history is that it will cause politicians to overcome the independence of the central bank, causing inflation as they splash money like free cash around the economy. Strict criticism of direct funding has increased, even through a series of crises when central banks have in fact bought a lot of government bonds. They just make sure to follow it in a whirring way - to hold bonds. But in a pandemic that imposes unprecedented requirements on the budget - and may reduce the ability of the bond market to finance - some monetary experts think this is exactly the time. point to breaking the glass of this type of policy.

$800 million loss

The son of the legendary founder of Hin Leong Trading said: "The Singaporean oil trader has hidden about $800 million in losses in futures trading, suggesting the company's bigger financial gap. much more than imagined. " The collapse of Hin Leong, one of the largest and most secretive forces in the world of fuel oil trading, shows a profound effect from the sharp drop in oil prices this year as a result of the Russian oil price war with Saudi Arabia is like the coronavirus pandemic. 

Lim Chee Meng, the only son of Lim Oon Kuin, said the company also sold a few million barrels of refined products that they used as collateral to secure loans from their banks. . As a result, the company faces significant shortages between oil reserves and committed inventory with its banks.