“Risk on” resumes! Data wins over virus concerns


Macroeconomic/ geopolitical developments

  • Global financial markets have started to resolve the indecisive theme that has been evident from the middle of June into more of a “risk on” bias to start July.
  • Markets have been caught between two competing forces; increasingly positive economic data compared to consensus and the rise in COVID-19 cases (particularly in the southern states of the US, but also in pockets globally).
  • The strong data seems to have won out over the past week, most significantly on Thursday after the US employment report, that came in far better than market expectations.
  • 4.8 million jobs were added to the US economy in June, with an expected number of around 3 million.
  • This served to build on Wednesday’s positive survey data from the Markit Manufacturing Purchasing Managers Index (PMI) for Europe and the US ISM Manufacturing PMI.
  • This was in turn further reinforced by Friday’s release of Markit Services and Composite PMI for Europe (during the Independence Day holiday being observed on Friday 3rd July).
  • However, the ongoing growth of the coronavirus in southern US states sees ongoing concerns, as many states have re-imposed lockdown measures, notably in Florida Texas, California and Arizona.
  • Furthermore, significant pockets of outbreaks globally; in Australia, Germany, Tokyo, Beijing and Leicester in the UK, have underscored ongoing risks.
  • In the UK further easings of lockdown measures kicked in on Saturday 4th July, including the reopening of pubs, restaurants and cinemas, but with the impact on the economy and the pandemic too early to quantify.
  • With the spotlight on the UK, there have been further negative soundings from both the UK and Europe with respect to the ongoing Brexit trade negotiations.

Global financial market developments

  • Global share averages attempted bullish breakouts from multi week ranges on Thursday, challenging notable June peaks.
  • From a technical analysis perspective, this now points to a potential extension of the bullish rallies seen from March-April and from mid-May-mid-June.
  • In Forex markets, there is still a note of caution, though the major “commodity” or “risk” currencies (AUD, NZD, CAD) have started to rally against the US Dollar.
  • Mixed messages again from the commodity world, Oil has probed back towards multi-month peaks, whilst Copper has setback from a new high posted in early July.
Oil chart

Key this week

  • Full focus will remain on new cases and deaths from the COVID-19 coronavirus, with particular concerns about the rises in the southern US states.
  • Central Bank Watch: Tuesday sees the Reserve Bank of Australian (RBA) meeting, interest rate decision and statement.
  • On the macroeconomic data front we get; US Non-Manufacturing and Composite PMI released by Markit, with the more watched US Non-Manufacturing PMI from the ISM on Monday, Tuesday brings German Industrial Production, Thursday sees the Chinese Consumer Price Index (CPI) data plus US Jobless Claims released, with Friday’s focus on the Canadian Employment report.
DateKey Macroeconomic Events
06/07/20Markit US Non-Manufacturing and Composite Purchasing Managers Index (PMI); ISM US Non-Manufacturing PMI
07/07/20RBA meeting, interest rate decision and statement; German Industrial Production
08/07/20Nothing of note
09/07/20Chinese Consumer Price Index (CPI); US Jobless Claims
10/07/20Canadian Employment report

Editor in chief

Steve Miley is the Market Chartist and has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Mar... Continued

Comment on this video

Your email address will not be published. Required fields are marked *

Latest Related News

Q1/Q2 Elliott Wave views for the Forex Majors – Exclusive interview with Jim Martens!

Here is an in-depth interview with Jim Martens, Elliott Wave International's (EWI) Senior Currency Strategist and editor of the trader-focused Currency Pro Service. In this interview, we will discuss the Major currency pairs, including EURUSD, the US Dollar Index (DXY), GBPUSD, USDCHF, USDJPY, AUDUSD and USDCAD. Here is a link to a free report on trading FX with EWI. It’s normally $79 and not available on… Continued

Dollar switches trend to up

US Dollar Index aims higher (DXY forecast)Euro breaks down - EURUSD forecastMajor negatives appear on Pound (GBPUSD forecast) and Aussie (AUDUSD forecast) Continued

WTI prices in 2020 and outlook for 2021

The year 2020 was a major crisis for oil prices as the COVID-19 pandemic destroyed demand with economies shutting down. According to IATA, passenger demand for air travel fell in February by 80% in Europe and USA and by 67% in Asia Pacific region. Prices collapsed in March to an unprecedented historic low. Oil practically became worthless for a short period of time. As OPEC+… Continued

Global Markets Outlook 2021

Initial Parameters: Chart analysis is technical and taken from medium-term historical patternTechnical projections based on a twelve-month time horizonTargets set are based on the most recent, significant technical adjustmentAnalysis is based on Elliot Wave and Fibonacci techniquesTechnical analysis only guides; exogenous factors can shock any marketMarkets, being capricious, forecasts are subject to revisionFundamental analysis can be commissioned on requestEquity sector analysis is thematic United States… Continued

Markets end 2020 in “risk on” mode

Macroeconomic/ geopolitical developments Trump finally signed the $900 billion COVID relief bill, a relief for markets.The EU-UK trade deal finally got done over the holiday season and was implemented at the end of 2020.Europe and the USA are still seeing aggressive increases in the numbers of cases, hospitalisations and deaths from COVID-19, as the new variant first identified in the UK is now being seen… Continued

Forex Brokers in your location


72% of retail investor accounts lose money when trading CFDs with this provider.


74-89% of retail investor accounts lose money when trading CFDs with this provider.


75% of retail investor accounts lose money when trading CFDs with this provider.


76.4% of retail investor accounts lose money when trading CFDs with this provider.