Holiday in many markets
Good Friday is a special day. A large part of Western countries have a day off from work. Meanwhile, a holiday Monday is a very local solution. It occurs not only in Poland, but also in the Czech Republic, Slovakia, and Hungary. However, remember that Monday is a working day in the USA.
What does this mean for the markets? Today, despite the fact that we are working, many exchanges (including commodity ones) will not open. Global oil prices closed yesterday and we will see them only after the weekend.
On Easter Monday, investors in the USA normally work. This is important because the market, despite the holiday in many countries, will process operations after a long weekend, which during a war carries the risk of large changes. Preparing for this event, investors yesterday bought oil very intensively, resulting in a price increase of Brent by over $8.
Did the oil market believe the address?
The Wednesday address by the US president was meant to calm the situation. We learned from it about the continuation of fighting in the Persian Gulf, as well as possible scenarios – both escalation and conflict resolution. There were also announcements of involving allies in stabilizing the situation in the region, specifically in clearing the Strait of Hormuz.
The fact that the market did not fully believe in the possible calming is best illustrated by the fact that WTI oil in the USA became more expensive than Brent oil. There are several reasons, but it turns out that high refinery demand caused a temporary higher price for the American commodity.
Until now Americans have not suffered as much as the rest of the world due to the war in the Persian Gulf, at least from the perspective of oil prices. Currently, however, the country, despite being the world's largest producer, is hit by huge price increases. Just yesterday oil rose by almost $13. This happened before a holiday, which further complicates the situation.
The question is how long the administration will be able to ignore high fuel prices. There are still 7 months until the elections, but support for Republicans is falling, and fuel prices only weaken it. The more expensive the fuel, the further the prospects for rate cuts, and thus the dollar strengthens.
Data from the USA
Yesterday we learned two important readings from the USA. On one hand, the number of unemployment benefit claims was 202 thousand. In the era before anti-immigration actions, this would have been a very good result. Currently analysts point out that it is unclear how much lower the figures should be expected. Still, it is a good result.
Below expectations also fell the US trade deficit. We must remember that the war in the Persian Gulf has clearly strengthened the dollar. The stronger the dollar, the less profitable export becomes, and the more import. As a result, analysts point out that in the short term current events should worsen this parameter.
Today in the macroeconomic calendar it is worth paying attention to:
14:30 – USA – labor market data.
