Trading Week Ahead: 6th July – 10th July 2020
Key Events and Data Releases This Week
USD ISM Non-Manufacturing PMI
AUD Cash Rate
RBA Rate Statement
EUR EU Economic Forecasts
USD Unemployment Claims
CAD Canadian Employment Change, Unemployment Rate
USD PPI, Core PPI
(Times adapted to AEST timezone)
Traders continued to deal with mixed messages and this was reflected in risk currencies as we saw another mainly choppy week. Negotiations between the EU and the UK remained mixed, which ultimately weighed in on the EUR. European data was upbeat, but the focus will remain on the UK’s exit. The EUR was the worst-performing risk major last week just holding in the positive to the USD and adding over 0.40% to the JPY. The GBP and AUD have seen better weeks with the GBP finding some direction. It added over 1% the Yen and close to 1% to the USD. Yes, we saw gains, but worries remain about how the UK economy will recover after the pandemic. The AUD was last weeks best risk major, adding over 1.40% to the Yen and 1.15% to the USD. This happened despite the continued trade tensions with China and a worryingly new COVID19 outbreak in Victoria. Buyers little fazed locally as the ASX200 also saw healthy demand adding over 4%.
Stock indexes, in general, have had a good few weeks, the DAX gained over 4%, and the Nasdaq once again hit new all-time highs with a 6% jump. US markets saw a shortened trading week due to the 4th of July holiday. Mixed messages continue from the U.S., but data remained mostly firmer. ISM Manufacturing PMI beat expectations, and for a second month running the NFP beat expectations with 4800K jobs added. Unemployment was another to beat expectations for the second month, coming in at 11.1% lower than the 12.4% expected. But the ADP Non-Farm Employment Change missed expectations as did Thursday’s unemployment claims. However, things in the U.S are far from good, and virus numbers continue to grow as do the death rates, the States saw a 50K infection rate jump in a single day last week. For now, stock indexes continue to ignore and continue higher. Oil bounced back as economic optimism supported buyer interest price trading over 5% higher. Gold saw a mixed week, price traded as low as 1757 but also hit new monthly highs at 1789. Influences are mixed with worries over remaining infections, better than expected data but a weaker USD. We have seen four straight weeks of gains on Gold and price might be starting to lose some momentum.
China surprised with higher than expected manufacturing PMI data and late last week IHSMarkit reported a rise in the global manufacturing output index PMI for June. With signs of recovery continuing, is this why we are seeing risk markets continue to ignore global and U.S. infection rates? This week data is light. The U.S report their ISM non-manufacturing PMI and the RBA meeting, rates are mainly expected to remain on hold. Canadian employment data ends the week, and traders might be looking for better than expected, staying with the current trend after Canadian GDP beat expectations last week. Higher oil prices helped the CAD to a stronger week. Looking at the Weekly USDCAD could this be the start of a new continuation lower?
Lastly, we want to reflect on another NDX100 (Nasdaq) weekly chart, what’s going to stop this train??