Asian stocks were pushed higher by the S&P 500 futures on Monday, and oil prices hit its five-week peak as the countries’ started taking efforts to phase out the re-opening of their economies, which stirred hopes among investors that the world was closer to emerging from a recession. The nationwide lockdowns brought about by the coronavirus that kept millions cooped up inside their homes for months are now being relaxed gradually. However, the incoming data from most of the economies across the world highlight the depth of the economic contraction and the increasing risks of long-term scarring that might possibly undermine the recovery process.
Japan, the third-largest economy of the world, was threatened by a recession in the first quarter. The industrial production, retail sales tumbled in April, pushing the U.S. economy to experience its deepest contraction ever since the Great Depression. The ongoing trade dispute between the U.S and China are significantly adding to the existing uncertainties in markets. U.S. lawmakers and officials are proposing to push American companies to move out their operations or key suppliers from China that will include new rules, tax breaks, and carefully structured subsidies.
The dollar has been highly range-bound, with its safe-haven appeal keeping it supported. Against a basket of currencies, it was last recorded at 100.340, having gained 0.7% since the previous week. The euro remained steady at around $1.0820. The pound also touched a seven-week low at $1.2073. In the commodity market, liquidity floods by central banks, along with record-low interest rates, helped lift gold prices to a seven-year peak. Metal also went up by nearly 1.2% to reach $1,762 an ounce. Oil prices rose as the demand started picking, with countries around the world beginning to ease travel restrictions.