US dollarThis Thursday was a busy day from the macroeconomic side so far as it started with the April Chinese Trade Balance, moved on with BOE unveiling its decision on monetary policy and the German industrial output plunging by 9.2%.
The S&P 500 and the Dow fell after U.S. President Donald Trump cast doubt on a trade deal with China and data showed U.S. private employers laid off 20 million workers in April, underscoring the economic fallout of the coronavirus outbreak.
Longer-dated Treasury yields jumped, and the yield curve steepened after the Treasury Department sharply increased the size of its long-dated debt auctions to help finance its rapidly expanding deficit.
The safe-haven yen and dollar rose, as investors sought refuge in these currencies in the wake of dire global economic numbers. Manufacturing data in the euro zone and the UK painted a bleak picture, undermining the single European currency and sterling. The dollar fell 0.42% against the Japanese yen to 106.13 yen. The euro was down 0.42% against the dollar at $1.0792. The pound jumped to $1.2380.
Oil dropped, as U.S. crude inventories ticked up and gasoline demand remained below normal seasonal levels, offsetting hopes for a recovery in demand as some countries ease coronavirus lockdowns. U Brent crude was down 3.75% at $29.81 a barrel. West Texas Intermediate crude fell 1.91% to $24.09 per barrel.
Gold fell, pressured by a stronger dollar and expectations that gold supplies will grow as bullion refineries resume operations, and on gradual improvement in investor risk appetite as countries have begun to ease coronavirus restrictions.
Post BOE’s decision the central bank will then publish the briefing from governor Andrew Bailey at 09:00 GMT. Christine Lagarde, President of the ECB, will speak later at 14:00 GMT. Looking forward the main data release of the day is the US Initial Jobless Claims coming at 12:30 GMT, predicted to be 3 million.