The record-breaking dive in US oil prices created a foul atmosphere at the open, while the latest UK jobs report threw up some surprises.
With no demand and no storage, US oil prices turned negative for the first time in history – meaning traders were being paid to take the black stuff off of producers’ hands.
This translated into another 8.9% slide from benchmark Brent Crude on Tuesday morning, sending the commodity to $23.65 per barrel. Not to beat the (oil) drum, but 6 and a half months ago it was trading above $86.
Acting as another reminder of the economic abyss the world is facing, Europe almost had no choice but to fall at Tuesday’s open, especially when the oil news is combined with the increasingly erratic situation over in the US. Trump tweeted that he is suspending all immigration to the United States, while certain states, like the Republican-led Georgia, terrifyingly plan to open back up as soon as this Friday.
The DAX dropped 200 points as it slumped back under 10500, with the CAC approaching 4400 following a 1.8% decline.
The FTSE, which has spent the last few sessions moving between 5700 and 5800, found itself nearing the bottom end of that range thanks to a 95 point-plus slide.
Things could have been worse for the UK if the day’s job data came in differently. For the 3-months to the end of February, the unemployment rate crept up from 3.9% to 4.0%; remember, that’s firmly pre-lockdown. In the same period wage growth slipped from 3.1% to 2.8% month-on-month, again painting an ominous picture of the jobs market before the effects of the pandemic really imposed themselves on the country’s economy.
However, the most important figure was the claimant count change for March, it being the only true covid-19 number of the trio. Fearing a similar situation to that in the US, analysts had forecast a 170,000 person increase in unemployment claims; instead it arrived at a pretty standard 12.1k. Of course, that likely means the ugly number will instead be delayed until April’s reading. Nevertheless, the FTSE and pound were left off in this regard, if only for now.
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