Another Step Higher Following Wall Street's Impressive Gains
Fiona Cincotta June 9, 2020 2:35 AM
The lifting of coronavirus lockdown and hopes of a quick recovery are feeding trader optimism, although the lack of fresh catalysts is seeing that optimism start to fade.
After another phenomenal rally on Wall Street, which saw the Nasdaq strike a fresh all time high and the S&P come close to wiping out all its losses for the year, Asian markets traded mixed. The lifting of coronavirus lockdown and hopes of a quick recovery are feeding trader optimism, although the lack of fresh catalysts is seeing that optimism start to fade.
Whilst recent data has shown a stark improvement from April’s bottom, the numbers still paint a grim picture. Yet traders are showing that they are more than prepared to see the economy in a glass half full manner. The jobs report is a good example. Traders focused on the 2.5 million jobs created rather than the 20 million jobs that have been lost.
BRC retail sales data here in the UK also added to mounting evidence that the economy was on the right track, with sales -5.9% in May compared to a year earlier. This was a vast improvement of April’s -19.1% drop giving optimistic traders reason to cheer. However, it was still the second worst reading since records began in 1995. After 8 straight days of gains the Pound is mildly lower versus the USD. That said it still remains close to three month tops above $1.27.
Eurozone data in focus
A slew of data is due from the Eurozone. German exports were considerably worse than forecast -24% vs -15.6% expected. Imports -16.5% vs -16%. The Dax has barely acknowledged the data whilst the Euro continues to show resilience against the slightly stronger US Dollar.
Eurozone unemployment and GDP figures are also due shortly.
Oil clawing back losses
Oil is attempting to claw back loses after falling sharply in the previous session after Saudi Arabia, Kuwait and United Arab Emirates confirmed that they would not extend an additional 1.18 million bpd in cuts on top of the OPEC+ cuts in July. The disappointment resulted in WTI and Brent shedding over 5%.
Today, oil is back on the rise as easing of coronavirus lockdown measures boost hopes that a recovery in demand will do some of the heavy lifting. Brent is sitting comfortably over $40 and the expectation, particularly now that New York is reopening, is that WTI will be back there soon.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.