Daily Analysis – 15th June 2020

The Week Ahead 15^th – 20^th June 2020

Traders would most likely expect a building up of ‘Breaking news’ with a ‘Risks-off’ mode as of Monday, potentially the result of concerns of a second wave of the coronavirus pandemic. Additionally, another group of investors could just be on a ‘wait-N-see’ mode for the Fed to confirm, whether or not it’s done with more Quantitative Easing (QE) for the moment. If that’s the case, then it would motivate traders and investors to start profit taking instead. Either way, massive sell-off was seen in the stock markets towards the closing of the markets on Friday and in early trading today. In the currency markets however, the JPY and CHF ended as overwhelmingly the strongest, followed by USD and EUR. AUD seemed to have been the worst performing whilst to have led commodity currencies and the GBP floor-ward.

For this week, in addition to UK economic data, which is where attention may gain momentum, unemployment corporate-wise quarterly earnings from Oracle and Kroger mark the end of earnings season in the US. As for the corporate reporting side from the UK, it does look busier with Ashtead and Berkeley Group full-year numbers due. However, with a spike in volatility, the main focus is likely to be on the release of final numbers in new US virus cases. In summary, 2^nd wave of the pandemic, could spark new waves of worry and anxiety in the markets with expectations surrounding the potential return of lockdowns in some states in the US.

Monday 15th June 2020

China Retail Sales will be released on Monday, with forecast to drop 2% and market to watch are the AUD, NZD, China indices and the CNH crosses. Additionally, the US Empire State June mfg Index is due and expected to rise to -32.5- Market to watch are the USD crosses and the US indices.

Tuesday 16th June 2020

Firstly, the JPY is the one to watch out for, due to the BOJ rate decision even though no change in policy is expected for the time being. For the UK, employment data will be due with May claimant count expected to rise by 290,000 but at the same time, unemployment in the UK is expected to also rise to 4.2%. The German ZEW index as well as the US retail sales will also be out on the same day.

Wednesday 17th June 2020

On Wednesday, most traders be watching the GBP crosses as UK CPI will be out with a rise expected at 0.5% YoY. Eurozone’s CPI on the other hand is expected to also rise so EUR crosses are expected to experience some level of volatility. In the US, housing starts and building permit for May are expected to fall so USD crosses need to be watched too. In Canada, CPI will be due with a fall expected of 0.8% YoY. With regards to Oil, US EIA Crude Inventories will be out following the 5.7 million stockpile rise in the preceding week, so WTI to watch.

Thursday 18th June 2020

Australia’s employment data will spark Thursday’s busy docket of data releases, with a rise expected of 6.9%, possibly impacting most AUD as well as NZD crosses. In the UK, BOE rate decision will be announced with no change in interests rate decisions expected but the QE program is expected to be increased by 100 Billion GBP. On the other side of the world, US initial jobless claim be released as well with expectation of a rise by 1.68 million from the 2 million in the previous week.

Friday 17th June 2020

On Wednesday, most traders will be watching the GBP crosses as UK CPI will be out with a rise expected at 0.5% YoY. Eurozone’s CPI on the other hand is expected to also rise so EUR crosses are expected to experience some level of volatility. In the US, housing starts and building permit for May are expected to fall so USD crosses need to be watched too. In Canada, CPI will be due with a fall expected of 0.8% YoY. With regards to Oil, US EIA Crude Inventories will be out following the 5.7 million stockpiles rise in the preceding week, so WTI to watch.

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