Equity bull theme resumes (despite US-China tensions)

Intermediate

Macroeconomic/ geopolitical developments

  • The positive “risk on” theme was again reinforced by additional positive steps regarding the launch of an €750bn EU recovery fund.
EU recovery fund
  • The “risk on” theme was evident despite tensions between the US and China increasing in late May, intensified by developments surrounding Hong Kong.
  • However, President Trump did not indicate economic sections and was seen as less dramatic than feared at Friday’s press conference, through did announce that the USA would leave the World Health Organisation.
  • Soundings continue to be encouraging regarding the potential for a coronavirus vaccine.
  • The number of new cases and deaths from the COVID-19 virus continues to decline in many European nations and US States, which are all continuing to relax lockdown restrictions and reopen their economies.

Global financial market developments

  • The recovery rally in global stocks has seen the major global averages post bullish breakouts from April-May consolidation ranges.
  • In the Forex space, the “risk on” theme is still not as strong as that seen in equities, but has seen the US Dollar weakening, as the Euro rallied.
EURUSD chart

Key this week

  • Central Bank Watch: Tuesday we get the Reserve Bank of Australia (RBA) meeting and interest rate decision, Wednesday brings the Bank of Canada (BoC) meeting and decision, and Thursday sees the European Central Bank (ECB) meeting and press conference.
  • Macroeconomic data of note includes; global Markit and Institute of Supply Managers (ISM) Manufacturing, Services/ Non-Manufacturing and Composite Purchasing Managers Index (PMI), Australian Gross Domestic Product (GDP), US Jobless Claims, US and Canadian Employment reports
  • New cases and deaths from COVID-19 will remain in focus as lockdown rules are relaxed in Europe and the US.
DateKey Macroeconomic Events
01/06/20Markit and ISM Manufacturing PMI
02/06/20RBA meeting and interest rate decision
03/06/20Australian GDP; Markit and ISM Services/ Non-Manufacturing and Composite PMI; BoC meeting and interest rate decision
04/06/20ECB meeting and interest rate decision; US Jobless Claims
05/06/20US and Canadian Employment reports

Editor in chief

Steve Miley 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 Market Chartist, the Editor-in...continued

Comment on this video

Your email address will not be published.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


Latest Related News

Day Trade Ideas: Video analysis – Dollar, WTI Crude, Gold, Emini S&P, Dow Jones

Wide analysis of the US Dollar, Crude Oil, E-Mini Future S&P 500 and the Dow Jones. Also taking a look at Gold and how it is doing in these volatile times. Continued

“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… Continued

Euro still exposed to renewed weakness – EURUSD forecast

The Euro versus US Dollar forex rate, EURUSD has been in an  erratic, but we would argue still negative consolidation range since our last report.This leaves the threat for further EURUSD losses into today, this week and early July. EURUSD day trade outlook: Further consolidation, bias stays lower to key 1.1166 Day trade update and view Again, an erratic consolidation Wednesday with a prod below 1.1189… Continued

Euro, Pound and Australian Dollar supports under threat

Euro-Dollar fails at first resistance - EURUSD forecastPound threatens to break down once more - GBPUSD forecastMajor support on Aussie evaporates - AUDUSD forecast Continued

Is the bear market rally top in? US COVID-19 cases weigh on stocks

Macroeconomic/ geopolitical developments Global financial markets continued the indecisive tone seen through mid-June into the end of the month, which has been in relation to competing forces; positive economic data/ strong retail demand/ support from the authorities on the one hand and the rise in COVID-19 cases on the other.The strong rally from mid-May into the first half of June, was driven to some extent… Continued

Forex Brokers in your location