Tuesday April 21st, 2020

As Coronavirus cases reach 2.5 million globally and the economic reality of global lockdowns saw crude futures suffer their worst day in history. The coronavirus-induced oil supply surplus caused oil prices to crash with US crude futures trading below $0 yesterday for the first time on record. The NYMEX crude hit (minus) -$37.63 before rebounding to -$7.00 this morning. The US is considering halting Saudi oil imports as a measure to help support the US domestic oil industry. Petro currencies fell over 1% vs US$, with NOK the hardest hit falling 2% vs US$. The fall in oil prices has hit equity markets and saw are return to safe have US$ buying. NY has seen six consecutive days of declines in coronavirus related deaths, expectations are building for a reduction of lockdown restrictions. Oil prices, coronavirus updates and US existing home sales (mar) will provide direction intraday. 

Oil prices tumbled as global demand remains low and global storage facilities are reaching maximum capacity. Brent crude fell below $20pb before rebounding to $21.50, down 16% overnight. C$ has fallen 1 ½% since Friday vs US$ as oil prices tumbled on Monday. A break of 1.4260 opens the potential of a re-test of 1.4480 (Mar25th). Oil prices remains the primary driver for C$, as well the Feb MoM Retails sales data will be watched closely for intraday direction.

Euro remains within a tight trading range vs US$. Euro is finding support from investors as EU countries start to reduce lockdown restrictions. Positive drops in active COVID-19 cases have been seen in Italy, Spain, France and Germany. Ongoing disagreements within the EU regarding common debit relief and investor safe haven buying is stalling the Euro strengthening. Intraday support remains 1.0810 with 1.1050 remaining key resistance level vs US$.

GBP continues to edge weaker vs US$ falling towards a two-week low despite some positive signals within the UK. Claimant counts rose just 12.2k vs projections of 172.5k due to the rollout of the government’s partial salary funding scheme. UK coronavirus deaths are falling, leaving the government split on when and how to ease restrictions. Brexit negotiations are continuing via video and reports have been that decisions have been constructive. 1.2280 provides minor support with 1.2165 remaining key GBP support.