• British government announced a new tariff regime
• US Stocks trade mixed
European shares give up part of yesterday's profits. On Monday, Berlin and Paris agreed on the creation of a 500 billion euro recovery fund to support the countries most affected by the coronavirus pandemic. This plan requires the approval of all 27 EU members. However Austrian Chancellor Sebastian Kurz said he had discussed this idea with his Danish, Dutch and Swedish counterparts and continued to oppose the transfer of money to other countries in the form of subsidies.
"We are sceptical," Kurz, was quoted as saying in the Oberoesterreichische Nachrichten newspaper. "Our position is clear: we want to show solidarity with states that were hit particularly hard by the crisis but we believe that loans are the right way, not grants."
"In the coming days we will present a proposal with our own ideas. We believe it is possible to stimulate the European economy and yet avoid a mutualisation of debt," he said.
UK government announced a new tariff regime, known as UK Global Tariff (UKGT), to replace the European Union's Common External Tariff from January 2021. Under the new regime, Britain will maintain tariffs on a number of products backing UK industries such as agriculture, automotive and fishing, but will cut levies on £30 billion worth of supply chain imports. Recent data showed the number of people claiming unemployment benefits in Britain rose by the most on record to the highest level since 1996 in April, while first-quarter labor productivity posted the biggest quarter-on-quarter decline in 46 years. Dax finished today’s session 0.2 % higher, CAC 40 lost 0.9 % and FTSE dropped 0.8%
US indices are trading mixed amid hopes of a potential coronavirus vaccine after Moderna’s phase 1 Covid-19 trial produced positive antibody responses in all 45 human volunteers tested. Investors also digest Fed Chair Powell and Treasury Secretary Mnuchin virtual testimony before the Senate Committee on Banking, Housing, and Urban Affairs which took place today. Chairman Powell reassured that the central bank is ready to use all its tools to help the US economy to recover, while Mnuchin confirmed that is planning to use all of the $500 billion that Congress provided for lending programs at the Fed.
Powell said the scope and speed of the downturn “are without modern precedent and are significantly worse than any recession since World War II.”
On the earnings front, Walmart reported better than expected figures while Home Depot results came in below expectations. "Home Depot's earnings report shows we shouldn't assume businesses deemed essential with a strong online presence are entirely immune from the effects of the virus," said Mike Loewengart, managing director of investment strategy at E*TRADE Financial Corp. During today’s session Dow Jones lost 0.39 %, S&P 500 is trading flat and Nasdaq rose 0.86%.
Oil prices fell today, although both WTI and Brent managed to stay above the $30 per barrel. Stronger upward movement is visible on the silver market. The price of this metal is currently rising by about 2.50% and it is possible that in the near future we will see a potential attack on the round $18 /oz level. Meanwhile, the price of gold is strengthening, along with slightly weakening US dollar.
Some noteworthy data reports will be released tomorrow. During the Asian session investors will get to know PBoC Interest Rate Decision. Inflation data from the UK and Euro Area will be the key releases of the European session while CPI readings from Canada and FOMC minutes will be on watch during US trading hours. Apart from that, oil traders will be looking at EIA Cushing Crude Oil Stocks Change.
USDCAD is testing key support level at 1.3909. If the sellers will manage to push the price further down then next support at 1.3709 may be at risk. On the other hand breaking above the downward trendline may lead to a shift in sentiment. 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.
