Most global stocks rose on Thursday, with major European indexes rallied around 1.5% to start the session amid the lingering hopes that coronavirus outbreak is peaking. However, stocks had to pare gains afterward, with US stock futures fell flat on the day after the initial rise as investors keep a cautious tone ahead of the upcoming OPEC+ virtual meeting.
It is widely expected that the group of producers will come to a consensus on cutting oil output to support the market struggling amid a dramatic decline in energy demand because of the pandemic. If successful, the potential deal could bring oil prices substantially higher from the current levels and thus drive global stocks north due to better risk sentiment.
In the longer term, equities will remain vulnerable to further losses as the economic consequences of the outbreak will persist for a long time, with the threat of a deep global recession remaining elevated.
Now, investors refrain from more aggressive buying as weekly US labor market data approach. Should the report disappoint again, risk sentiment will deteriorate amid rising recession fears. In this context, gold prices may extend today’s gains and challenge the $1.670 region again as safe-haven demand will surge.
Meanwhile, the dollar is slightly lower against major counterparts, with EURUSD is preparing to retest the 1.09 handle if the pressure persists in the short term. On the positive side, Spain’s Prime Minister assessed the virus data as encouraging. By the way, daily new coronavirus cases and deaths declined over the past 24 hours. Once above 1.09, the pair may challenge the 1.0925 intermediate resistance.
As for oil, Brent crude has exceeded the $34 handle during the recent trading after comments from Russian authorities. According to Kremlin spokesperson Dmitry Peskov, Moscow backs joint, coordinated action to steady oil market. At the same time, he noted that a deal can hardly happen without other countries joining. The key OPEC+ meeting is scheduled for 1400 GMT. If the producers manage to strike a deal, oil prices will rally and could even exceed the $40 handle depending on the outcome of the meeting.