Overnight on Wall Street: Tuesday 28 April 2020

In the FX space, major currencies were mixed against the US dollar. Amid a risk-on environment following the gradual reopening of certain economies, haven currencies like the Japanese Yen, Swiss franc and the US dollar struggled to find demand while commodity currencies like the Canadian and Australian dollar were among the best performers.

As the greenback retreated, the Aussie dollar rose higher and is now consolidating in the 0.64 level. The local currency is likely going to remain at the broader sentiment of the markets as the Aussie calendar is relatively empty at the beginning of the week.

Ahead of a busy economic calendar, traders are awaiting the central banks’ policy statements and the US GDP figures which will be released across the week.

Oil Market

In the oil market, the turmoil continues, mostly dragged by an SEC filing by one of the world’s largest oil fund – the United States Oil Fund (USO). The USO has revised its investment in oil futures contracts to concentrate on futures contracts that are further out, as per the following:

• Approximately 30% of its portfolio in crude oil futures contracts on the NYMEX and ICE Futures in the July contract
• Approximately 15% of its portfolio in crude oil futures contracts on the NYMEX and ICE Futures in the August contract
• Approximately 15% of its portfolio in crude oil futures contracts on the NYMEX and ICE Futures in the September contract
• Approximately 15% of its portfolio in crude oil futures contracts on the NYMEX and ICE Futures in the October contract
• Approximately 15% of its portfolio in crude oil futures contracts on the NYMEX and ICE Futures in the December contract
• Approximately 10% of its portfolio in crude oil futures contracts on the NYMEX and ICE Futures in the June 2021 contract
• USCF will roll the current portfolio positions into the positions described above over a three-day period with approximately 33.3% of the investment changes taking place each day on each of April 27, 2020, April 28, 2020, and April 29, 2020.

Crude oil prices remained under heavy selling pressure. Attention will now be on the weekly EIA and API reports for fresh trading impetus.

Gold

As risk sentiment improves, gold struggled to find buyers and retreated from recent highs. Even though certain economies or states are detailing plans to resume activities, uncertainties still prevail. The XAUUSD pair is also finding support on a weaker US dollar and is still trading above a key level of $1,700.

Key Upcoming Events

Jobs/Applicants Ratio, Unemployment Rate, BoJ Monetary Policy, Outlook Report and Press Conference (Japan)
ECB Bank Lending Survey (Eurozone)
S&P Case Shiller Home Price Indices, Richmond Fed Manufacturing Index and Consumer Confidence (US)

Key Earnings Results Ahead

Google

Alphabet Inc. (NASDAQ: GOOG, GOOGL) will hold its quarterly conference call to discuss first-quarter 2020 financial results on Tuesday, April 28, at 1:30 p.m. PT/4:30 p.m. ET.

Pepsi Co

PepsiCo, Inc. (NASDAQ: PEP) will issue its first-quarter 2020 (ended March 21) financial results and other related information on Tuesday, April 28, 2020. The press released will be at approximately 6:00 a.m. EDT and live question and answer session is scheduled at 8.15 a.m. EDT

Starbucks Corp

Starbucks Corporation (Nasdaq: SBUX) will release its second-quarter fiscal year 2020 financial results after the market close on Tuesday, April 28, 2020, with a conference call (webcast)to follow at 2:00 p.m. PT.

Caterpillar Inc

Caterpillar Inc. (NYSE: CAT) will release first-quarter 2020 financial results at 5:30 a.m. CDT on Tuesday, April 28. A real-time, listen-only teleconference and webcast of the quarterly results call that Caterpillar conducts with security analysts and institutional investors will begin at 7:30 a.m. CDT on Tuesday, April 28.

3M Co

3M (NYSE: MMM) will hold its first-quarter 2020 earnings conference call on Tuesday, April 28, 2020, at 8 a.m. CDT.

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