Chinese official manufacturing data for March, the period when Chinese factories started reopening after the worst of the coronavirus and after movement restrictions started gradually being lifted, showed a far better reading than most market watchers hoped for. The reading of 52, up from only 35 in February, has moved above the 50 line which demarcates contraction from expansion. It also provided the light at the end of the tunnel for Europe, now in the full grip of the pandemic, indicating that the economic bounce back post the virus could be relatively quick.
On the FTSE Melrose Industries is trading up nearly 20% followed by tobacco and betting companies. Supermarkets have recently been the flavour of the day and Tuesday they are also trading higher after data showed that panic buying and stocking up before the virus fully has started expanding in the UK increased retailers’ sales by 20%.
But the pound has lost a little bit of ground to the euro and the dollar as traders hold back on buying sterling, expecting that the health situation in the UK will become worse over the next 10 days.
WTI crude recovers after drop to pre 2000 lows
WTI is recovering after flirting with the $20 line, a level not seen since the turning of the millennium, and a level causing President Trump to call on Vladimir Putin to change his sales strategy over the next month. However, with WTI crude hitting various stop loss levels on its way down, technical trading is likely to have more effect in the short term than any fundamental changes.
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