Midday Analysis – 16th July 2020

Today’s Market Outlook

During today’s Asia-Pacific session, the risk tone turned while pressuring high-beta currencies, commodity-linked currencies and supporting safe-havens. The risk-off tone also saw broadly weaker indices, lower yields and higher levels of volatility. Despite the slew of data releases during the session, some positive and some negative – it’s Chinese Retail Sales data which caught the market’s attention and ultimately resulted in a negative risk tone. 

In the Currencies market, we spotted some buying interests for the CAD/CHF by Intuitional traders, which began to kick off during yesterday’s closing of the European session. Interestingly, the CAD/CHF is seen to be positively correlated, and quite highly with the AUDCHF. 

Overall, the break of London session is seeing weakness on the GBP, AUD & the NZD, while strength is building up for the EUR, JPY & the CHF. 

Today’s High Impact Events

The times below are GMT+3

14.45 – ECB Interest & Deposit Rate Decision

The euro area composite interest rate for new deposits with agreed maturity from households increased by 4 basis points to 0.32% in January 2020, and the interest rate for overnight deposits from households remained broadly unchanged at 0.02%. The European Central Bank’s ruling body is likely to keep both its key interest rate and quantitative easing program steady in today’s announcement, but don’t be deceived by the apparent absence of news or risks events.  

Potential instruments to Trade: EUR crosses.

15.30 – US Retail Sales Control 

The control group is all sales, excluding receipts from auto dealers, building-materials retailers, gas stations, office supply stores, mobile homes and tobacco stores. This filtered number is a more precise method of gauging consumer spending, and consumer spending is a large component of U.S. GDP.  Economists expect the rebound to continue, perhaps reflecting the first half of the month, whilst supporting the hopes of a V-shaped recovery.  

Potential instruments to Trade: USD crosses.

Coronavirus Status Update 

US COVID-19 cases rose by 60,971 (Prev. +58,858) and the death toll rose by 773 (Prev. +351). Furthermore, AFP later tweeted that US cases rose by a record 67,632 citing tracker data, while a major newswire tally suggested US coronavirus cases rose by at least 67,889 to 3.52mln which was the 2nd largest daily increase on record. California COVID-19 cases rose by 11,126 (Prev. +7,346), while Texas coronavirus cases increased by a new daily record of 10,791 and deaths rose by a record 110, according to the State Health Department (Newswires). 

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