The state of emergency in Japan as a signal of premature optimi

Apr 7, 2020

Despite the fact that the general epidemiological situation in the world is still extremely unfavorable, some “hot heads” in the financial markets have again started to show impatience and predict end of “lockdowns” around the world in the nearest future.

As a result, stock indices crawled up even against the backdrop of absolutely failed statistics from the US labor market. Moreover, the figures for the number of confirmed cases of infection of almost 1.4 million and deaths over 75K did not stop the most impatient buyers.

At the same time Japan could declare a state of emergency in the country. And the point is not that the number of cases has reached a critical point (the current 4K against the background of other countries looks like a model of well-being), but that the Government feels a real threat of losing control over the situation. Japan announced a new program to stimulate the economy and compensate the negative effects of coronavirus.

In general, the news is bad enough for the world. The worst is still not behind (especially for the economy) and it’s still too early to relax. So we consider the growth of the stock markets to be an excellent opportunity for sales at a higher prices. No more. And the dynamics of gold yesterday in general confirms this: a re-test of 1700 looks more and more inevitable.

Today we will continue to sell the dollar, despite all its reluctance to fall. First of all, we will do this in a pair of USDJPY, as well as in EURUSD. We will not touch the pound yet - hospitalization of the Boris Johnson is not the best reason for buying the country's currency.

Optimism in the oil market also faded somewhat. After it became clear that the new OPEC + without the participation of the United States may not take place, and the United States is not eager to limit its own production, oil stopped its growth yesterday, and on the whole, Monday opened with a solid gap down. Frankly, we have serious doubts about the success of the meeting on Thursday, and even more so in achieving the announced reduction volumes of 10 million b / d. Accordingly, this week we expect an increase in downward pressure in the oil market and we will sell oil until Thursday and its results. At the same time, the basic medium-term purchase positions continue to remain relevant, and we use the possible decline in oil to the region of $ 20 (WTI brand) to restore purchases from $ 20.