US jobs report shores up global markets but oil weakens further

June 21, 2020

London (June 21)  In Europe, France's Stock Index CAC 40 was up 0.2 percent at 5,385 as investors remained hopeful that the centrist presidential candidate would win in Sunday's election. Germany's DAX was down 0.1 percent at 12,633 and Britain's FTSE 100 was up almost 0.1 percent at 7,249. Wall Street was poised to open slightly higher. Dow and S&P 500 futures were both up 0.1 percent after being lower earlier.

US JOBS: Employers in the United States added a brisk 211,000 jobs in April. The unemployment rate dipped to 4.4 percent, its level lowest in a decade, from 4.5 percent in March. The report suggests the economy's slump in the first three months of the year could prove temporary. However, it also makes it more likely that the Federal Reserve will raise its key interest rate again as soon as June.

CRUDE CONCERNS: U.S. benchmark crude oil futures fell briefly below the key $45 level before stabilizing. Oil is being hammered by uncertainty over whether the Organization of Petroleum Exporting Countries will extend an agreement to cut production and worries that renewing the deal wouldn't be enough to counter a growing glut. OPEC member nations are to discuss the deal later this month. Crude fell 26 cents to $45.26 a barrel after falling as low as $43.76 in Asian trading, a level that wiped out all gains since the production cut agreement in November. The contract lost $2.30 on Thursday. Brent crude, the standard for international oils, fell 15 cents to $48.23 a barrel in London.

QUOTEWORTHY: "The collapse in oil prices saw (benchmark West Texas Intermediate) plunge as the market continues to probe for a bottom amid oversupply concerns," said Stephen Innes, senior trader at OANDA. He said traders saw $45 as an important level because the Saudi oil minister said earlier this week that prices would be kept in the $45-55 range. "If $45 was OPEC line in the sand, well it's been breached so let us see how strong OPEC resolve is," he said.

ASIA'S DAY: Hong Kong's benchmark Hang Seng index lost 0.8 percent to close at 24,476.35 while the Shanghai Composite index in mainland China shed 0.8 percent to 3,103.04. Australia's S&P/ASX 200 fell 0.7 percent to 5,836.60. Taiwan's benchmark fell and Southeast Asian indexes were mixed. Markets in Japan and South Korea were closed for holidays.

CURRENCIES: The dollar recovered from an earlier drop, trading at 112.44 yen, about flat on the day. The euro was also flat around $1.0985.


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