Stocks rise as Fed expands emergency lending programs

April 10, 2020

By IFCMarkets

Dollar falls on jobless claims jump

US stock market extended gains on Thursday as optimism over Fed’s announcement of $2.3 trillion expansion of its financing program offset concerns after dismal job loss claims data. The S&P 500 rose 1.4% to 2789.82. The Dow Jones industrial average advanced 1.2% to 23719.37. Nasdaq composite index added 0.8% to 8153.58. The dollar weakening resumed as Labor Department reported 6.6 million Americans filed for unemployment insurance for the first time last week, while Federal Reserve announced a new lending program to provide $600 billion support for midsize businesses and $500 billion for states, counties and cities. The live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, fell 0.6% to 99.55 and is lower currently. US exchanges are closed today in observance of Good Friday, and those in Europe will also be closed for Easter Monday.

FTSE 100 led European indexes’ advance

European stocks recovered on Thursday. EUR/USD joined GBP/USD’s accelerated climbing yesterday with both pairs higher currently. The Stoxx Europe 600 index advanced 1.4% led by travel and leisure shares. Germany’s DAX 30 gained 2.2% to 10564.74. France’s CAC 40 added 1.4% while UK’s FTSE 100 rose 2.9% to 5842.66 as the Bank of England agreed to temporarily finance UK government borrowing.

Nikkei rises while China’s stocks fall

Asian stock indices are mixed today in light trading after markets shrugged off an additional 6.6 million jobless claims in US. Nikkei ended 0.8% higher at 19498.50 despite continuing yen slide against the dollar. Markets in China are falling as China’s consumer inflation slowed in March: the Shanghai Composite Index is down 1% while markets in Hong Kong and Australia are closed for Good Friday.

Nikkei rises toward MA(200) 4/10/2020 Market Overview IFC Markets chart

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Brent fell as Mexico disagreed with OPEC cuts

Brent futures prices ended lower yesterday erasing earlier gains after reports Mexico is holding up a deal by the world’s largest oil producers to curb production. The Organization of the Petroleum Exporting Countries and its allies agreed to cut production by 10 million barrels a day in May and June in the teleconference meeting. Saudi Arabia and Russia will each limit their production levels to 8.5 million barrels a day, with all members agreeing to cut supply by 23%. However Mexican officials disagreed with the proposed cuts to its production, and walked out of videoconference negotiations. Delegates still hope to convince Mexico in further talks today. June Brent crude lost 4.1% to $31.48 a barrel on Thursday. Exchanges are closed today in US and Europe.

Gold rallies as Dollar pulls back

Gold prices are extending gains today. Prices jumped yesterday: gold for June delivery rose 4.1% to $1752.80 an ounce on Thursday.

Market Analysis provided by IFCMarkets

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