Massive monetary and fiscal spending is giving investors just enough breathing room to figure out the extent of the economic damage done. However, that oxygen supply is rapidly depleting with increased US COVID-19, and global case counts. To that end, Asia markets are trading on the back foot today as risk appetite wanes, pointing to more turmoil ahead.
However, it was the fall in prices that triggered a more broad-based cross-asset sell-off after the WTI front-month contract fell below the key $20/bbl at the Asia open. Fortunately for risk sentiment, the breach of that psychological level didn’t lead to an even deeper dive in prices.
Prices are tentatively stabilizing, and risk is turning back on again as market makers are back replenished their shopping list of go-to equities. But the week is still young as the oil market faces an unprecedented demand-supply shock that is challenging oil storage facilities. At the same time, Saudi Arabia and Russia show no signs of…