Midday Analysis – 8th July 2020

Today’s Market Outlook

Asian equity markets were interspersed, due to efforts to shrug off the weak handover from global peers being somewhat impeded, by the record infection rates stateside and a slew of punchy US-China related headlines. The ASX 200 (-1.2%) was quiet as Australia’s 2nd largest city heads into a 6-week lockdown and with the declines in the index led by notable losses in consumer stocks and financials. 

The Nikkei 225 (-0.7%) on the other hand, was pressured by the ongoing virus flare up in Tokyo where more than 100 new cases were reported for a 6th consecutive day, but with downside stemmed after data showed the largest increase in bank lending on record.  

In the currencies market, the ongoing negative tone continued to support safe-havens with both USD and JPY stronger across the board with Daiwa Securities stating: “The mood changes day by day, but the dollar looks to be supported for now as investors turn more cautious about the virus. The Fed’s comments on the economy sound sombre. In contrast, high-beta currencies remain pressured with AUD the weakest of the FX majors, followed closely by NZD and CAD, respectively. 

Today’s High Impact Events

The times below are GMT+3

02.50 – Japan Current Account n.s.a (Post)  

Japan’s current account surplus in May dropped 27.9 percent where amongst its’ key components; the country’s goods trade deficit narrowed 18.1 percent to ¥556.8 billion but the services balance swung from a surplus of ¥152.5 billion a year before to a deficit of ¥92.5 billion. 

08.45 – Switzerland Unemployment Rate (Post)  

In May, Switzerland’s Unemployment Rate rose to 3.4% compared to +3.3% booked in April, as per the latest data published by the Federal Statistics Office on Tuesday. 

11.45 – ECB De Guindos 1st Speech 

Luis De Guindos is the Vice-president of the European Central Bank since June 2018. Meanwhile, the speech by the European Central Bank (ECB) Vice President Luis De Guindos will be eyed for fresh trading incentives. Also, the sentiment on the European indices and USD dynamics will be closely followed amid incoming virus updates worldwide.

17.00 – ECB De Guindos 2nd Speech

In his last speech, the ECB Vice President Luis de Guindos said that it was a necessity in the times of crisis for Bond Buying to take place. He also praised the German response to the economic impacts of the coronavirus pandemic. 

Coronavirus Status Update 

US CDC reported total cases rose 46,329 (Prev. +44,361) death toll rose by 322 (Prev. +235), while AFP later tweeted that US coronavirus cases rose by a new daily record of 60,209, citing the Johns Hopkins tracker. (Newswires) California coronavirus cases increased by at least 10,201 which was a record daily increase, according to a major newswire tally and Texas cases also reportedly rose by a record 10,028 (Prev. +5,318). (Newswires).

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