Wall Street equities erased earlier losses and rallied overnight due to a recovery in some stocks that declined since the start of the year. All three major indexes plunged earlier in the session after the data showed that when 3 million Americans filed for unemployment last week. As a result, the eight-week total exceeded 36 million. Later, the rally was driven by higher oil prices and a surge in bank stocks. As such, Wells Fargo added more than 7% while Citigroup and JPMorgan rose over 2% and 4%, respectively. The Dow Jones Industrial Average gained 1.6%, the S&P 500 index added 1.2%, and the Nasdaq Composite index advanced 0.9%.
Asian markets followed suit and mostly gained on Friday, though the general tone was mixed amid the uncertainty surrounding the coronavirus crisis, US-China trade relations, and economic risks from the pandemic. China unveiled mixed economic data. Industrial production rose 3.9% in April versus +1.5% expected. Meanwhile, retail sales declined 7.5% last month versus the expected drop by 7%. China’s Shanghai Composite finished marginally lower. Japan’s Nikkei 225 reversed earlier losses and rose 0.05% while South Korea’s Kospi was down 0.02%.
In Europe, stocks opened higher after decent gains on Wall Street. Investors also cheered upbeat data on China’s industrial production. Still, the lingering trade tensions between the US and China kept stocks on course for weekly declines. The pan-European STOXX 600 rose 1.06%. Miners and chipmakers rallied after China’s industrial production report.
Meanwhile, the dollar is little changed after the recent ascent amid risk aversion. As investor sentiment has improved, the safe-haven USD demand waned on Friday. EURUSD is clinging to the 1.08 handle after a brief dip to 1.0774 yesterday. GBPUSD has been under a mild selling pressure around 1.22. USDJPY remains around 107.00 for the third day in a row. Later in the day, US retail sales data could affect dynamics in USD pairs.
In other markets, oil prices briefly exceeded the $32 handle and registered one-month highs around $32.50. where sellers reemerged and sent Brent back under $32. Anyway, short-term market sentiment has improved somewhat after the recent consolidation around the $30 figure. The market was supported by the news that Saudi Arabia decided to cut June oil exports to Asia.