Daily summary: Global equity markets start the week on sour note

• Growing concerns regarding second wave of coronavirus infections
• Oil remains volatile amid demand concerns
• Britain and EU agreed "that new momentum was required" in Brexit talks

European indices finished today's session lower. The risk-off mood returned on the global markets, after the China and Japan both reported a fresh spike in new coronavirus cases.  Also weak data from China weighed on market sentiment. Both industrial production and retail sales struggled to recover in May.
Today a videoconference took place between the British Prime Minister, Boris Johnson and European officials, including the head of the European Commission Urszula von der Leyen. Both sides agreed that the need to intensify trade talks in the post-Brexit era. It is worth recalling here that, theoretically, the transition period for the UK ends on December 31, 2020. 
Earlier, it was rumored that an inter-party group was forming that wanted the government to vote on extending the transition period. Given the coronavirus pandemic, this would be the best scenario for Great Britain. It is difficult to imagine Great Britain at this point without trade agreements in 2021. It is worth remembering, however, that Johnson has so far refused to talk about extending the transitional period and the Tory Party still has a majority in parliament. Meanwhile Germany's economy ministry expects that  GDP in the second quarter will decline more sharply compared to the first quarter, and warned that the recovery from the coronavirus crisis will take some time.  DAX 30 fell 0.30%, CAC 40 lost 0.40% and FTSE 100 finished 0.70% lower.

Wall Street started the week in negative territory. Investors are not happy with the fact that street protests still take place, tensions between China and the USA have not been eased, and the coronavirus pandemic is accelerating. Just a month ago, we observed stabilization of new cases below 100,000 per day, but currently medical services report almost 150,000 new cases per day. This may be due to loosening of restrictions around the world. Luckily at the moment mortality is limited. However, if the number of fatalities increases, restrictions may be imposed again. This is what the market is very much afraid of.

The VIX index has reached the highest levels since the second half of April. The attention of investors will focus on Fed Chair Powell Testimony. On the other hand, investors will not learn anything new. During the last Fed meeting, Jerome Powell avoided answering questions about whether the current situation on the stock market is a bubble. Powell does not want to cause crash on the stock market and is likely to provide some hope for market bulls, given the recent revision of the macroeconomic data. During today’s session Dow Jones fell 0.54%, S&P500 lost 0.34% and Nasdaq  is trading flat.

Gold was trading lower, as many retail investors had to liquidate their positions due to the pressure that was visible on the more risky assets. Last week’s selloff in equities caused the sharpest liquidation of speculative positions in U.S. futures contracts since mid-April, according to data provided by the Commodity Futures Trading Commission. Net speculative long positions declined by  35,000 contracts, levels unseen for almost a year. However interest in bullion still remains at record high level. More money flowed into gold-backed exchange-traded funds in the first five months of this year than in any full calendar year in history, according to data provided by World Gold Council. Gold futures  on Comex exchange dropped 0.5% at $1,728.20 an ounce, having earlier fallen as low as $1,706.35. Spot gold fell 0.6% at $1,721.28. Silver futures declined 0.7% to $17.36 an ounce, while platinum futures fell 0.2% to $871.40 an ounce.

WTI crude trades mixed, hovering around $ 36.2 a barrel and having touched a session low of $ 34.4 in  Reuters reported that an OPEC-led monitoring panel will meet Thursday to discuss ongoing record production cuts and see whether countries have delivered their share of the reductions, but will not make any decision. Meanwhile Brent  hovered around $39.2 a barrel, having touched a session low of $37.2 per barrel.

Some noteworthy data reports will be released tomorrow. RBA Meeting Minutes and BoJ Interest Rate Decision will be the key release of the Asian session while employment figures from the UK and  ZEW Economic Sentiment are the main data scheduled for the European session. US retail sales figures and Fed Chair Powell Testimony will be on watch during US trading hours.

GBPUSD bounced off the local support at 1.2463 and rally. Should upbeat moods prevail, resistance at 1.2737 may come into play. This level is additionally strengthened by 200 MA (red line).Source: xStation5