Intraday Market Thoughts

Bouncing Appetite after Gilead Flub

by Adam Button
Apr 24, 2020 16:07

Risk risk appetite re-emerges on a combination of US Covid-19 infections hitting their slowest pace in three weeks, China reporting no deaths for the ninth day and the announcement from the US House of Representatives passing a $484 billion package to aid small businesses and hospitals. The news helped offset a selloff late Thursday following an FT report indicating that Gilead's Remdesivir drug hadn't been helpful in a Chinese study on the virus. Our Dow30 trade was stopped out, leaving 5 trades open.

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Bouncing Appetite after Gilead Flub - Dow Spx Apr 24 2020 (Chart 1)

Weak UK retail sales (-5%) and poor US durable goods figures (-14) earlier were shrugged by indices.

A series of soft Eurozone PMIs were capped by an indecisive European summit in a combination that weighed on the euro. The eurozone services PMI was just 11.7 compared to 22.8 expected and you would hope that would send a strong message to European leaders that more needs to be done. If ever there was time for fast action, it's now. The  eurozone structure is so slow-moving that another summit ended with positive words and no action. There's talk it could take until 2021 until there's a broad eurozone relief package.

EURUSD remains somewhat buffered by broad US dollar weakness, attempting to hammer out a positive candle after 4 straight daily declines. Also not a potential double top on the daily USDX.


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