Risk neutral so far
Macro investors universally take a gloomy view on the global economic outlook but acknowledge the unprecedented scale and power of the policy pushback in the US and Europe. So there remains a mostly neutral consensus on equities at the moment.
Will S&P 500 run out of steam this week?
However, the current rally could run out so steam this week as traders pivot to earnings and the real economy this week, but if investors stop fighting the rebound, there's more scope to the rally. Traders will be focusing on corona-rebound names, which have been triggering the short squeeze. As well, investors will be dialed into Financials this week, which helped drive S&P 500 higher last week (+19%); as the bid to Tech begins to soften, Financials in the absence of a Tech bounce will not be able to hold the market higher (even if there are positive EPS this week).
Forex
A pretty dull day so far as uncertainty around this week's economic data has kept USD supported.
The PBoC reference rate came in as expected, but the CNH is a bit weaker this morning in the general risks uncertain tone. But also, China's debt creation was staggering. March saw an unprecedented pick up in lending and borrowing in China. Total financing topped $730B. I'm not sure how kindly currency traders are welcoming this massive debt load, which could end up in a dramatic asset bubble burst.
Oil update
Oil prices rebounded off this morning's lows as the market continues to gingerly price out extreme risk premium post-OPEC++ production cut. But by no means are we out of the woods just yet as the cuts might not be large enough to prevent oil storage facilities from saturating if April demand devastation hits near the project highs of 25-30 mb/d decline in demand.