* Oil suffers as USO ETF sells front-month futures
* Petrocurrencies dragged under
* Ugly company reports weigh on stocks
* End in sight for some lockdowns
* Markets eye Fed, ECB meetings this week
* World FX rates in 2020 http://tmsnrt.rs/2egbfVh
By Marc Jones
LONDON, April 28 (Reuters) - Another big fall in oil prices
dragged hordes of petrocurrencies under on Tuesday but even an
HSBC warning of mounting bad credit and a near 80% plunge in
BP's profits could not keep stock markets down for long.
There was some relatively good news to go with the bad and
ugly numbers.
Plans to ease major economies out of coronavirus lockdowns
were continuing, UBS lifted European banks 4% with reassuring
earnings, .EU while Italy's bonds recovered further after it
had dodged a damaging credit rating downgrade on Friday.
GVD/EUR
Oil was total carnage though. U.S. WTI CLc1 , which went
negative last week, dived 20% in Europe after a scramble by the
United States Oil Fund (USO) USO.P , the largest oil-focused
U.S. exchange-traded product, to shift its holdings had
underscored the dwindling capacity to store excess supply.
O/R
Benchmark brent Brent LCOc1 was down a more manageable
4.7% but it was still below $19 a barrel which is miles beyond
where even the most efficient producer countries can balance
their national finances.
Petrocurrencies were hit too. Canada's dollar CAD= and the
Norweigen crown NOK= were both around 0.2% lower, Russia's
rouble RUB= was down nearly 0.4%, while Brazil's record low
real BRL= and Indonesia's rupiah IDR= had both tumbled 1%
overnight. EMRG/FRX
"Normally, a lower oil price disproportionately boosts
consumer sentiment. However, the storage problem is due to
reduced oil demand - if you are not putting petrol in your car,
you will not notice the price," UBS Chief Economist Paul Donavan
said.
"The good news is that the money saved by not buying petrol
now may be spent later in the economic bounceback."
Away from wild oil, there were signs that the market
volatility triggered by the rapid spread of the coronavirus over
the last few months was easing
The U.S. stock market's so-called fear gauge, the VIX
.VIX , was at its lowest in a month and the U.S. dollar was a
tad softer against other major currencies =USD at 107.055 yen
per dollar JPY= and $1.08697 against the euro EUR=EBS /FRX .
MARKETS BUILD ON FEDROCK
Markets are looking for any forward guidance from the U.S.
Federal Reserve, which meets later on Tuesday and is due to
issue a statement on Wednesday. The European Central Bank then
meets on Thursday.
The Fed has led the global monetary policy response to the
coronavirus pandemic by cutting interest rates to zero and
aggressively buying bonds and corporate credit - a programme it
extended overnight to include municipal debt of smaller U.S.
cities. Analysts said it was unlikely that the Fed would make
further major policy moves, given the scope and depth of recent
action to counter the economic damage caused by COVID-19.
Sweden's central bank had opted not to take its interest
rates back into negative territory on Tuesday, sending its
currency up 0.5% and to its highest in over a month. EURSEK=D3
"The major central banks are at comparatively expansionary
levels. All of them have beefed up asset purchases as much as
they could. All of them are close to or even at the minimum
lower interest rate bound," wrote Thu Lan Nguyen, an analyst at
Commerzbank.
"They are likely to remain there for the foreseeable future,
which would point towards relatively stable exchange rates."
The ECB has had less room to manoeuvre on rates and
announced an enormous bond-buying program. Still, bickering and
indecision over a eurozone rescue package has some in the market
expecting deeper action still, perhaps as soon as Thursday.
That has seen the euro left behind as expectations for an
economic recovery from the pandemic has pressured the U.S.
dollar and driven a rally in riskier currencies such as the
Australian dollar.
Still, the fresh fall in oil put the brakes on the charging
Aussie AUD=D3 , which had climbed more than 1% earlier and has
recovered nearly a fifth from a 17-year low struck last month.
Elsewhere the pound GBP= rose 0.3% to $1.2456, having
earlier been pressured after Prime Minister Boris Johnson warned
it was too dangerous to relax a strict lockdown in Britain.
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Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Global bonds dashboard (DO NOT USE UNTIL UPDATE FOUND) http://tmsnrt.rs/2fPTds0
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
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