Equities: US futures on the front-foot with market participants returning from their elongated break, which in turn sees the S&P 500 pierce the psychological 3000. As coronavirus infection rates fall, while economies re-open investor sentiment remains buoyant, particularly as hopes on a vaccine persists. Elsewhere, tensions between the US and China have been seemingly shrugged off temporarily after China avoided notable retaliatory measures following recent actions by the US.
Currencies: Risk on has been the theme of the session with the US Dollar coming under sizeable selling pressure and back down to the 99 handle. Alongside this, with month-end soon upon us, investment bank portfolio month-end rebalancing models signal modest USD selling.
The Euro saw a fresh bid on the back of the ECB’s contingency plans to continue purchasing German debt if the Bundesbank were forced to quit PSPP following the German Constitutional Courts at the beginning of the month.
With just a week until the final round of EU-UK trade talks before the transition period extension deadline (Jun 30th), reports this morning signal that the EU is looking to ease their demands on fisheries (one of the key hurdles), which in turn may break the current deadlock in talks.
Looking Ahead: Little of note on the economic schedule. Speakers in focus, Fed’s Kashkari, BoC’s Poloz and Wilkins.
Source: Refinitiv, DailyFX
WHAT’S DRIVING MARKETS TODAY
- “Gold Price Remains Constrained, Risk-On Rally Stalls Upside Progress” by Nick Cawley, Strategist
- “US Dollar Shorts Slashed, GBP/USD & EUR/USD Shorts Pick-Up – COT Report” by Justin McQueen, Analyst
- “Canadian Dollar Forecast: USD/CAD Price- Ready to Edge Lower?” by Mahmoud Alkudsi, Analyst