Daily summary: Global equity markets mixed at end of a uneasy week

• Growing trade tensions between the US and China
• European indices close mostly higher
• Gold Hits 7 year high

 

European stocks  finished the day in mixed moods. On one hand investors welcomed  upbeat data showing China's demand for crude picking up in April, alongside a rebound in factory activity. Meanwhile, Sterling depreciated to 7-week low  after the EU's Brexit negotiator Michel Barnier said that the third EU-UK negotiating round was "disappointing", while Prime Minister Boris Johnson's Cabinet confirmed it would not be extending the Brexit transition deadline beyond December. Meanwhile French Finance Minister Le Maire announced he would hold another meeting later in the day with the country’s automobile executives, as the government works on plans to support struggling industries including car manufacturing, tourism and aerospace. European indices  finished the day with mixed results: German DAX rose 1.2%France's CAC 40 stayed flat, UK's FTSE 100, advanced 1%, Spain's Ibex  fell 0.9%, Italy's FTSE MIB was trading flat.

 

Today's Trump administration decided to block global chip supplies to blacklisted telecoms equipment giant Huawei. In response, China announced that is ready to put some of the major US companies on the  "unreliable entity list", which could mean launching investigations and imposing restrictions on Qualcomm, Cisco Systems and Apple, as well as suspend the purchase of Boeing airplanes, the Global Times reported.

Market sentiment worsened after another set of grim data from the US economy. Today’s data showed both U.S. retail sales and industrial production falling at record pace in April under the impact of a nationwide patchwork of lockdown orders, while similar figures released by China earlier in the day suggested that the recovery – especially for consumers – will be slow and uneven. However the University of Michigan's consumer sentiment for the US rose to 73.7 in May 2020 recovering slightly from the previous month's eight-year low of 71.8 and above market expectations of 68, a preliminary estimate showed. Still, it was the second-lowest reading since December of 2011.

 

US indices trade mixed during today's session.  Despite yesterday's dynamic rebound, investors are still worried about the next wave of the coronavirus infections and that the recession will last longer than previously anticipated and that here will be no V-shaped recovery.

During  an afternoon press conference President Donald Trump reportedly said the U.S. will win the battle against the coronavirus pandemic even without an effective vaccine, and claimed that the disease will disappear "at some point"
"We think we’re gonna have a vaccine in the pretty near future, and if we do we’re gonna really be a big step ahead,” Trump said at a Friday event detailing the U.S. effort to develop a vaccine, according to CNBC. "And if we don’t we’re gonna be like so many other cases where you had a problem come in, it’ll go away at some point, it’ll go away."

The US President's press conference did not cause major market volatility. Dow Jones is trading 0.23 % lower, S&P500  fell 0.17% and NASDAQ is trading flat.

Spot gold jumped nearly 1% to touch $1,749.45 per ounce on Friday, its highest level since November 27th of 2012 and sets for its biggest weekly gain  after another raft of dismal economic data underlined the limited scope for alternative havens such as bonds to offer a significant premium for the foreseeable future.

Economic calendar for Monday is almost empty. Annualized GDP data from Japan is main print scheduled for release but it should not have much of an impact on prices, therefore markets are likely to be steered by coronavirus-related and political newsflow.

GBPUSD broke below major support  level at 1.2123 after the European Union and Britain clashed over a post-Brexit trade deal following a third round of negotiations. If current sentiment prevails then local support at 1.20 may come into play. Source: xStation5.

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