Daily summary: Global equities gain on US stimulus package optimism

7:13 pm 5 August 2020

• Negotiations progress on next coronavirus stimulus package
• Silver climbs to over 7-year high, Gold hit new ATH
• Oil prices rebound amid positive economic data

European indices finished today's session higher as recent PMI data showed that business activity in the Eurozone returned to growth in July. Also upbeat news regarding the potential agreement on a US coronavirus relief package boosted market rally. On the earnings front, both Allianz SE and DHL quarterly earnings came above expectations while Commerzbank AG projected a full-year loss. DAX 30 rose 0.5% CAC added 0.9% and FTSE 100 finished 1% higher.

US indices are trading higher as better than expected macroeconomic data and positive earnings results from several US companies lifted market sentiment.  ISM's non-manufacturing activity index increased to 58.1 last month, the highest since March 2019, meantime  Disney unexpectedly reported quarterly profit. Also CVS Health, Humana and Regeneron Pharmaceuticals reported better than expected results while Johnson & Johnson announced a deal with the US government to manufacture millions of doses of its candidate vaccine to treat COVID-19 in case it proves successful. These news completely overshadowed the fact that ADP report, which is considered a precursor to the NFP report which will be released on Friday, came in far below analysts' expectations. Today's reading showed private payrolls increased only by 167,000 while market expected 1.5 million rise.
 
Investors also welcomed positive news regarding stimulus negotiations. Yesterday Treasury Secretary Steven Mnuchin said that congressional Democrats and White House negotiators are trying to reach a deal by the end of this week and that both sides have made progress on key elements of the project. Also House Speaker Pelosi said today, that she is confident that lawmakers will have agreement on coronavirus relief, however she declined to say whether lawmakers must reach agreement on coronavirus aid this week. In her opinion President Trump can't use executive orders instead of legislation for coronavirus relief package. Meanwhile tensions between Washington and Beijing also eased somewhat after it was announced that representatives of the two countries would meet in mid-August to review the trade deal.
 
Despite these positive news  investors remained concerned about a spike in coronavirus infections worldwide as US, Brazil and India, which are the three countries hardest hit by the pandemic, reported over 50k new cases yesterday. There is also concern about the increasing number of deaths, especially in Latin America. The region has now recorded more than 206,000 deaths, approximately 30% of the global total.
 
Oil prices rose on Wednesday reaching highest level since early March, after recent EIA and API reports showed that US crude inventories declined more than expected last week. WTI crude futures touched $43.5 per barrel and Brent crude futures hit $46.2 a barrel.
A weaker U.S. dollar and continuing appetite for safe haven assets pushed gold to new record highs. During today's session  gold price rose 2% to $ 2,061.80 an ounce. Meanwhile silver rose nearly 3% to $27 an ounce, its highest level since April of 2013.
 
There is quite a lot on the agenda tomorrow. During the European session investors will get to know BOE interest rate decision after which Governor Andrew Bailey will hold a press conference. During US session investors attention will focus on the Unemployment Claims report which may provide another hint ahead of Friday's NFP data. On the corporate front, T-Mobile US,  Siemens AG, Adidas, Uber, Electronic Arts Inc. will publish their quarterly results. 
USDCHF continues the move to the downside. Currently currency pair is testing major support level at 0.9056. Should a break below occur, downward move may accelerate. Next support is located at 0.9010. However, if buyers manage to halt declines here, upward correction toward 0.9179 resistance could be on the cards. Source: xStation5

The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.

Share:
Back
Xtb logo

Join over 935 000 XTB Group Clients from around the world.

We use cookies

By clicking “Accept All”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts.

This group contains cookies that are necessary for our websites to work. They take part in functionalities like language preferences, traffic distribution or keeping user session. They cannot be disabled.

Cookie name
Description
SERVERID
userBranchSymbol cc 2 March 2024
adobe_unique_id cc 1 March 2025
__hssc cc 8 September 2022
SESSID cc 2 March 2024
__cf_bm cc 8 September 2022
intercom-id-iojaybix cc 26 November 2024
intercom-session-iojaybix cc 8 March 2024

We use tools that let us analyze the usage of our page. Such data lets us improve the user experience of our web service.

Cookie name
Description
__hstc cc 7 March 2023
__hssrc

This group of cookies is used to show you ads of topics that you are interested in. It also lets us monitor our marketing activities, it helps to measure the performance of our ads.

Cookie name
Description
hubspotutk cc 7 March 2023

Cookies from this group store your preferences you gave while using the site, so that they will already be here when you visit the page after some time.

Cookie name
Description

This page uses cookies. Cookies are files stored in your browser and are used by most websites to help personalise your web experience. For more information see our Privacy Policy You can manage cookies by clicking "Settings". If you agree to our use of cookies, click "Accept all".

Change region and language
Country of residence
Language