• Germany likey tp extend lockdown deadline
• Dollar finds bid in risk-off mood
• Nikkei -1.33 Dax 1.91%
• UST 10Y 0.63%
• Oil $20/bbl
• Gold $1721/oz
• BTCUSD $7061

Asia and the EU

• No Data

North America Open

• USD 8:30 Weekly Jobless Claims
• USD 8:30 Philly Fed
• USD 8:30 Building Permits
• CAD 8:20 ADP

Markets were generally quiet in Asian and early European trade today with risk-off flows reversing in early Frankfurt dealing as index futures traded about 0.5% higher ahead of the North American open.

There was no fresh news to drive price flow as governments continued to struggle with damage from COVID-19 which passed 2M inflection mark yesterday. In the UK the government suggested that the lockdown would be extended for at least another 3 weeks while in Germany the government hinted that restriction may ease soon even as the country saw a spike in new cases and death rates.

Overall, the health crisis remains at a standstill with some promising signs that the rate of infections may be starting to flatten as the draconian lockdown measures reduce the risk of a person to person transmission. Still, as we noted before a return to “normal” conditions will likely require significant behavioral changes including perhaps the mandatory wearing of masks or face coverings in public until a vaccine is created which according to experts may take up to 18 months.

Meanwhile the focus today will shift to North American data with markets once again looking at the weekly jobless unemployment claims which are expected to print at 5M versus 6.6M the week prior. Some analysts, however, have pointed out that the continuing jobless claims figure which is anticipated to print at 13.5M versus 7.45M the week prior may be a better measure of the state of the labor market. In the government’s PPP program is truly working as it is meant to be, employers would have maintained payroll in order to convert the low-interest loans into grants.

A smaller than expected rise in continuing claims would provide investors with some measure of optimism that the dramatic fiscal moves are working at stabilizing the economy while everyone waits out the virus. On the other hand, if the numbers miss their mark suggesting that labor income situation is becoming dire, then the reaction from the capital markets is likely to be swift and severe with stocks unwinding much of their recent gains while the buck sees a fresh wave of risk-off flows as the day proceeds.