Daily summary: Global stocks slip as hopes fade for quick economic rebound

 

Europen inidces finished the session in red as concerns about a second wave of COVID-19 infections and its impact on global economy weighted on market sentiment after California Governor Newsom reimpose restriction measures in order to contain the rapid spread of the coronavirus. In addition, tensions between the US and China increased after Washington formally rejected most of Beijing's maritime claims in the South China Sea. American Secretary of State Michael Pompeo said that "Beijing’s claims to offshore resources across most of the South China Sea are completely unlawful, as is its campaign of bullying to control them". European investors are looking forward to ECB monetary policy meeting on Thursday and an EU summit later this week as European leaders will be discussing the €750 billion common recovery plan and the bloc's long-term budget. Today DAX lost 1.06%, CAC 40 dropped 1.25% and FTSE 100 finished 0.10% lower.

 

US indices are trading mixed during a volatile session as investors digested a mixed quarterly earnings reports from the major US banks but technology stocks fell on worries over new business restrictions in California. The dollar index erased early gains to trade at 96.3 on Tuesday after data showed US consumer prices rose by the most since August 2012 in June, while a record increase in COVID-19 cases could keep inflation muted and allow the Fed to unveil more stimulus measures in coming months.

Gold rose on Tuesday and is trading around  $1,800 an ounce, supported by concerns over a delay in global economic recovery and US-China tensions and as the dollar lost momentum.

WTI oil managed to erase early losses and is holding above $40.3 per barrel, after OPEC announced that oil demand would drop by 8.95 million bpd in 2020, slightly lower compare to last month forecasts, before rising by a record 7 million bpd in 2021 as the global economy recovers from the coronavirus crisis.  All eyes will be on the upcoming OPEC meeting although the cartel most likely will reduce the record supply cut of 9.7 million bpd to 7.7 million bpd from August through December. Brent crude traded around $43 a barrel.

There is quite a lot of data scheduled for release tomorrow.  BoJ interest rate decision  and Westpac Consumer Confidence Index will be the key releases of the Asian session while UK inflation figures will be on watch during European trading hours. Apart from that,OPEC will start its two-day  meeting. Some investors belief that OPEC and Russia could cut production again given the continued worries about demand. During the US trading hours, attention will be paid to BoC interest rate decision, US - June industrial production figures and EIA Crude Oil Inventories report. Last but not least, FED’s Bullard is scheduled to speak. On the earning s front Goldman Sachs, U.S. Bancorp and eBay Inc., will publish their quarterly results.