May 04 2020 1
Hello, we are back from a long holiday. Today we see some optimistic signs of a come-back from the outbreak. Let's check out all the hottest news that can affect the market greatly today. From that, we can develop our forex trading strategies properly.
Warren Buffett’s cautious move
Warren Buffett is taking more cautious steps during this time. With a record $137 billion in cash piled up at Berkshire Hathaway, Buffett received a series of weekend questions from shareholders who wanted to know why he didn't act when the companies All companies aspire to liquidity in the context of a shutdown because of a pandemic. But Buffett said: "This crisis is different."
The reputation of a well-known investor allowed him to act as the last lender during the 2008 financial crisis, increasing the series of deals that generate 10% of annual dividends from big and famous firms. But when panic and shutting down because the virus hit the stock market in March and even started to freeze the debt market, the Federal Reserve beat him with a series of never-before-seen emergency measures. While Berkshire bought back $1.7 billion of its stock in the first quarter, the Fed net sold stocks until April when betting on four major US airlines.
About the outbreak
Coronavirus infections in the United States have increased 2.3% in the past 24 hours, below the daily average for a week. Gilead Science plans to give remdesivir to patients within a few days after US emergency assistance. New York has recorded fewer new deaths in more than a month as the number of hospitalizations decreased. Russia has reported more than 10,000 new cases, the highest number of outbreaks. The number of daily infections in the United States and Italy decreases as leaders are aiming to reopen their businesses without causing a new infection. Spain recorded the least deaths in more than 6 weeks. Meanwhile, US Secretary of State Michael Pompeo said there was "solid evidence" that an outbreak of the new coronavirus epidemic had begun in a laboratory in Wuhan, China. And doctors debate the timing of the Covid-19 treatment vaccine.
The market is back
Money markets saw quiet moves in early Monday, though sentiment remains fragile after the start of the new month with risky assets. The New Zealand dollar slipped with the British pound and the euro, although authorities made most of the moves on the major currency pairs. Trading volume may be reduced due to the holiday season in Japan and Treasury Bonds will not be traded until the London session opens. Stock traders will watch the opening price of the S&P 500 futures contract after global stocks plunged more than 2% on Friday. China is also closed for holidays. Meanwhile, the first full trading week of May could be a test week for emerging markets.
RBA kept interest rate the same
The Reserve Bank of Australia is expected to maintain its target of 3-year bond yields and cash ratio at the same 0.25% on Tuesday. The statement following the meeting of Governor Philip Lowe will likely hint at the economic scenarios that are forthcoming in the quarterly forecast update released on Friday. Last Thursday, the RBA skipped buying bonds in the secondary market, the first time since the announcement of the decision to control the yield curve six weeks ago that brought about 50 billion AUD (32.3 billion USD) government bonds and federal bonds on a range of different terms.
This move has brought the yield on 3-year Australian government bonds to the target level. Governments worldwide have deployed more than $8 trillion to combat the economic collapse from the coronavirus pandemic. In the coming years, countries will continue to flood the bond market to increase the cash needed to fund such programs.