Oil sinks again when investors worry about the economic cost of Covid-19 – business live | Deal

Good morning, and welcome to our continued coverage of the global economy, financial markets, the eurozone, and business.

Anxiety over the 2020 Big Block recession is troubling the markets, even as stocks have rebounded quite a bit in recent weeks.

Oil is under pressure again this morning, after falling more than 7% last night to two-week lows.

Brent crude has fallen another 1.5% in early London operations to just $ 29.18 a barrel, and US crude is returning to $ 20 a barrel. That means they have lost more than half their value this year.

Traders are skeptical that last weekend’s Opec ++ deal to cut 10% of the world’s oil supply will trigger a strong market pandemic.

And who can blame them, as the International Monetary Fund predicts the deepest recession since the Great Depression, with painful crises across the world.

China’s policymakers have acted overnight by lowering a key medium-term interest rate to record lows and paving the way for a similar reduction in benchmark interest rates.

But that did not prevent the CSI 300 index from ending the day in red, 0.6% less.

European stocks are also falling in early trading, with the Stoxx 600 falling 0.3%. Britain’s FTSE 100 has lost 17 points to 5774, in addition to Tuesday’s 51-point drop (-0.9%).

Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, says investors are becoming gloomier as the Covid-19 recession strikes.

News of how long and how deep the coronavirus-led recession should be should continue to make global headlines and soured investor mood. The IMF warned yesterday that the economic recession that will follow the ‘Great Blockade’ will be the most pronounced in a century, while the British Office of Budgetary Responsibility (OBR) said the UK economy could contract as much as 35% in the second This year’s quarter is the worst since 1956. Leading banks are also expecting growth slowdown of more than 30% in developed economies in the second quarter, and the figures may not be overstating.

In these circumstances, and with the imminent first quarter corporate earnings, the recent gains we have seen in the stock markets could be the calm before the storm. Investors could close their positions and run to safety in the blink of an eye. This explains why safe-haven assets are curiously offered despite solid gains in global equities.

In recent weeks, markets had been buoyed by the hope that the blockages could be eased soon and that people would return to the office, the store, and even the pub. But gradually, more investors are realizing that the coronavirus will also cause long-term economic damage.

As Marketwatch says:

“Most analysts ask:” When will economies return to work? “Which we think is a wrong question,” Boris Schlossberg, managing director of BK Asset Management, said in a note Tuesday.

“The much more relevant question is:” When will aggregate demand recover to pre-virus levels? “That is a much more difficult dilemma to assess given the massive damage done to consumer balance sheets.”

Also comes today

The IMF will release its Fiscal Monitor later today, noting the state of government finances, as Covid-19 greatly increases lending.

We also expect to see a big drop in retail sales in the US. USA And a drop in factory production in the New York region.

The agenda

• 13:30 BST: International Monetary Fund publishes its Fiscal Monitor
• 13:30 BST: US Retail Sales USA By March, they are expected to drop 8%
• 1:30 PM BST: Empire survey of New York State manufacturing in April, expected to drop to -32.5 from -21.5
• 3pm BST: Bank of Canada Interest Rate Decision
• 15:30 BST: weekly oil inventories in the US USA