Risk Aversion Lingers As US Unemployment Soars

Risk aversion began to creep back into global markets yesterday as figures released by the US Department of Labor indicated a further 6.65 million Americans filed for unemployment benefits in the final week of March, taking the total claimants to just shy of 10 million for the month.

This means that more US citizens registered as unemployed in the past two weeks than in the last six months combined. The numbers also far exceed the previous biggest monthly increase of 695k set at the peak of the Great Recession in October 1982:

The market consensus prior to the announcement predicted only half of the final reading and attentions now turn to non-farm payrolls later today. Estimates of -100k seem relatively optimistic ahead of what will undoubtedly be the first contraction in over a decade.

With the number of confirmed Covid-19 cases within the USA  now pushing 250,000 and related deaths touching 6,000, the calls have grown louder for further intervention from both the Federal Reserve and the US government – despite last weeks $2 trillion rescue package.

Elsewhere, oil prices jumped 30% following a tweet by President Trump claiming that Russia and Saudi Arabia would be cutting back on production by up to 15 million barrels. Neither Russian President Vladimir Putin nor Saudi Arabian crown Prince Mohammed bin Salman confirmed such a negotiation taking place.