• Beijing reports new coronavirus cases
• Dexamethasone might reduce COVID-19 death rate
• US retail sales surge
European equities finished today's session higher, after investors morale in Germany hit the highest level since March 2006 amid growing expectations that the economy will bottom out by summer 2020. However upward movement was mainly caused by yesterday's FED statement. Central bank is ready to begin purchasing corporate bonds through the secondary market corporate credit facility (SMCCF) to infuse liquidity. Previously, FED performed such operations through ETFs. This is good news for companies whose debt may not necessarily have been in ETF's interests. Meanwhile in Great Britain the latest jobs figures showed that the number of vacancies fell to a record low in May; the Claimant Count reached 2.8 million; and early estimates for May from Pay As You Earn Real Time Information (PAYE RTI) indicated that the number of payroll employees dropped by 612,000 compared with March. All major European indexex finished session in green. DAX 30 rose 3.4%, CAC 40 added 3.05% and FTSE 100 finished 2.9% higher.
U.S. stocks also jumped on Tuesday after the recent report showed a record rise in retail sales during May. Market sentiment was lifted by data showing that a cheap steroid drug Dexamethasone have a potential to reduce COVID-19 death rate by around a third among those with the most severe cases of infection. Also investors welcomed the fact that US administration is working on a $ 1tn infrastructure spending package to stimulate economic growth. Today all eyes were on Fed Chairman Jerome Powell testimony, but this event did not cause any significant reaction in the markets. Powell reassured that The Fed is committed to use its full range of tools to support the US economy in this challenging time although those tools are reserved for times of emergency so they will be put away when the coronavirus crisis is over. Head of FED said that the US continues to face a difficult and challenging time, as the pandemic is causing tremendous hardship and the GDP is likely to contract at a record pace in this quarter. Investor sentiment deteriorated after news of a potential second wave of infections. Beijing saw an unexpected jump in number of new cases, while new infections and hospitalizations swept through more US states, including Florida and Texas. During today's session Dow Jones rose 2.40%, S&P 500 climbed 2.28 % and Nasdaq is trading 2.00% higher.
Brent crude futures rose more than 2.5% and WTI oil climbed over 2.0% after a report from the International Energy Agency (IEA) showed the OPEC + reached 89% compliance in reducing oil production. OPEC members fulfilled 86% of their obligations with Saudi Arabia reaching 100% while non-OPEC countries complied 94% with Russia achieving 97%. Report also showed that oil demand decreased less than expected during current quarter, but still at an unprecedented pace. EIA is expecting a record drop of demand for 2020 followed by a record recovery in 2021.
There is quite a lot of data scheduled for release tomorrow. Inflation figures from the UK and Eurozone will be the key release of the European session while CPI data from Canada and EIA Crude Oil Inventories will be on watch during US trading hours. Apart from that, FED chairman Jerome Powell will continue his testimony. This week investors await an European Council meeting at which EU officials are set to discuss a common recovery fund and a new EU long term budget.
USDCAD managed to bounce off the support zone at 1.3525 and is trying to push higher. Should upbeat moods prevail, resistance at 1.3709 may come into play. On the other hand, breaking below the support may trigger a bigger downward move toward 1.3328. Source:xStation5
Daily summary: Silver plunges 9% 🚨Indices, crypto and precious metals under pressure
US100 loses 1.5% 📉
🚨Gold slumps 3% amid markets preparing for Chinese Lunar Year pause
Cocoa falls 2.5% to the lowest level since October 2023 📉
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