Fear returns, the pound is in danger, US unemployment

Markets have desperately refused to acknowledge reality. Forecasts of the World Bank, OECD, estimates of leading investment banks - all were by no means. But the gloomy Fed estimates of the future US economy in 2020 (-6.5%) seem to have been able to provide some effect. As a result, the level of fear in the financial markets has risen quite sharply.

This was followed by a chain reaction in financial assets: stock markets went down, safe-haven assets (Japanese yen, gold) went up as well as the dollar. Oil was under pressure, as well as emerging currencies.

It is still difficult to say whether we will get the effect of a snowball and the bubbles will begin to burst, but the fact of a sharp stop of previous trends is quite important and symptomatic.

Recall that in addition to the bad macroeconomic data on the horizon, there are still a lot of causes for concern, starting with protests in the USA or tensions between the USA and China and ending with the fear of the second wave. In general, our recommendation to "sell" in the US stock market every day only gets more relevant.

Yesterday's data on the jobless claims in the United States (jobless claims grew by 1.5 million) did not generate optimism: nearly 21 million people still receive unemployment benefits.

As for today, the hero of the day (or rather anti-hero) is likely to be the pound. UK production and GDP statistics in April are expected. According to OECD estimates, it is Great Britain that takes the first place in the world in terms of the rate of decline in GDP in 2020 (-11.5%). So, there is more than enough reasons to expect devastating data. The pound is already under serious pressure from the failed negotiations between UK and EU. So weak data will almost certainly provoke massive sales. In this light, selling the pound is the # 1 trading idea for today.