• ECB kept interest rates on hold
• S&P 500 dropped from a five-week high
European indices finished today's session in red after the ECB kept monetary policy on hold, following months of unprecedented measures to support the bloc's economy amid the coronavirus crisis. Now investors await the EU leaders meeting to discuss the EUR 750 billion coronavirus common recovery fund and the EU’s next-term budget. Also growing trade tensions between US and China weighed on market sentiment. US Secretary of State Mike Pompeo announced that the US is willing to implement visa restrictions on certain Chinese companies amid human rights violations. Meanwhile investors are trying to digest mixed set of economic data from China. GDP rose 3.2%, well above market expectations, but retail sales were lower than expected, dropping 1.8% in June. After publication of today's data the Shanghai Composite fell 4.5% and the Hang Seng in Hong Kong dropped 2.1%. In Europe DAX lost 0.4%, CAC40 declined 0.5% and FTSE100 finished 0.7% lower.
US indices are also trading lower, as concerns about the economic toll from surging coronavirus cases nationwide were amplified by data showing elevated levels of unemployment claims. US retail sales figures came in better than expected in June, but a rising number of in new coronavirus infections is making a negative impact on the battered economy. Recent jobless claims report showed that 1.3 million US citizens applied for unemployment benefits last week, above analysts’ expectations of 1.25 million. Recent spike in new cases forced some states such as California to shut down again, which caused concerns of more business damage and slowing the pace of a Wall Street rally. Many analysts also pointed out that the S&P 500 is having problems with breaking above 3,230 pts, its breakeven level for the year. On the earnings front Morgan Stanley (MS.US), Bank of America (BAC.US)and J&J (JNJ.US) posted better than expected quarterly results. Netflix (NFLX.US) is due to report after the market close. Meanwhile Twitter (TWTR.US) stock is trading under pressure, following a security hack that targeted some of Twitter’s highest-profile users in an attempted cryptocurrency heist. Company is investigating this security breach, which impacted the accounts of former President Barack Obama, Tesla CEO Elon Musk and others. A tweet, that was rendered inactive about 10 minutes after it went out, from Musk's account read "Feeling greatful [sic], doubling all payments sent to my BTC address! You send $1,000, I send back $2,000! Only doing this for the next 30 minutes." According to CoinDesk, Twitter accounts for Gemini, Binance, KuCoin, Coinbase, Litecoin's Charlie Lee, Tron's Justin Sun, Bitcoin, Bitfinex, Ripple, Cash App, and CoinDesk, were also compromised. Also Tesla (TSLA.US) is trading lower as recent data from marketing research firm Cross-Sell showed that its vehicle registrations in California dropped almost 50% during the second quarter.
Oil prices fell on Thursday, with Brent trading around $43.40 per barrel and WTI at $40.80 per barrel, after OPEC+ confirmed they would decrease July’s record production cuts to 7.7 million bdp from August until December. Meanwhile California Resources (CRC.US), the largest oil driller in the state, has filed for Chapter 11 bankruptcy protection, becoming the latest casualty of the recent oil price crash.
There are no major data prints scheduled for release on Friday. Euro zone core inflation rate will be the key release of the European session while US Building Permits and Housing Starts will be on watch during US trading hours. Apart from that, investors will get to know Michigan consumer sentiment and inflation expectations figures. Last but not least, EU leaders will meet in Brussels to discuss the long-term EU budget 2021-2027 and the recovery plan. On the earnings front, BlackRock Inc., Volvo, Ericsson, Nordea Bank, Snapchat, Danske Bank will publish their quarterly results.
USDCHF depreciated to around $0.945, its lowest level since July 2nd, as rising Sino-US tensions and surging number of new coronavirus cases prompted demand for the US dollar. On Tuesday, head of the SNB Thomas Jordan announced that the central bank will continue to intervene strongly in the foreign exchange market to stop the rise of the highly valued franc in order to prevent deflation and protect the export-orientated economy. Currently currency pair is testing the 0.9433 support level. If sellers will manage to push the price below it, then next support at 0.9374 may be at risk. Local resistance is located at 0.9469. Source: xStation5The 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.
