Morning Report

Morning Report – Tuesday 28th April

Main Headlines

WTI extended losses in Asia after tumbling 25% in New York. In addition to the glut a liquidity squeeze is hitting prices as brokerages limit clients’ ability to add positions in certain contracts and increase margin requirements.

Oil’s free fall started to weigh on global markets, with U.S. stock futures drifting lower and Treasuries rising despite signs of progress in the fight against the pandemic. Asian stocks and European futures were mostly steady. New Zealand’s shares jumped after the nation emerged from a strict nationwide lockdown. Gold slid. Base metals were mixed.


The U.K. is considering gradually curtailing a furlough program designed to support companies contending with the ravages of the outbreak, the FT said. The Treasury is considering reducing wage support to 60%, then 40%, from the current 80%. About 4 million jobs are being protected by the program. The pound gained in its longest winning streak in a month as Boris Johnson’s return to work fuelled speculation he could consider moving toward lifting the lockdown. Sterling has also been buoyed by a weaker dollar and increased risk appetite.


PM Pedro Sanchez is expected to announce loosening measures in Spain after today’s Cabinet meeting, while PM Edouard Philippe will present plans to ease confinement steps in France to the National Assembly. Italy saw the fewest new infections in seven weeks as it prepares to reopen.


The Fed expanded the scope of a $500 billion emergency lending program that provides short-term credit to state and local governments. Population thresholds for its Municipal Liquidity Facility were lowered to 500,000 for counties and 250,000 for cities. The bank had been criticized when it became clear many large cities wouldn’t qualify, disproportionately affecting cities with large minority populations. The dollar benefitted slightly from risk aversion caused by volatility in oil.

Main Economic Data/Central Banks/Government (All Times BST)

  • 7:45 a.m.: France April consumer confidence
  • 8:00 a.m.: Spain 1Q unemployment rate
  • 8:30 a.m.: Riksbank rate decision
  • 9:00 a.m.: ECB publishes bank lending survey
  • 10:00 a.m.: Italy sells bills, U.K. sells bonds
  • 1:00 p.m.: Hungary rate decision

Corporate Events

Earnings include Alphabet, Pfizer, Merck & Co., Starbucks, Caterpillar, BP, 3M, Southwest Airlines, Harley-Davidson, UPS, Ford, Xerox.

Corporate Highlights

HSBC booked $3 billion for expected credit losses in the first quarter, the most in almost nine years and nearly double estimates.

UBS fared better, posting a 40% surge in net income to about $1.6 billion. It indicated the “high quality” of its credit portfolio may shield it from more widespread loan losses.

Novartis kept its sales and profit forecasts for the year, with key heart and psoriasis treatments expected to help it weather turmoil from the pandemic.