Europe Points Lower On Mixed Chinese Data, Post Impressive US Jobs
Fiona Cincotta June 8, 2020 7:35 AM
Astonishing US jobs market data was offering support, whilst a mixed picture over China’s economic recovery from covid-19 dragged on broader sentiment.
After a phenomenal week last week which saw European bourses charge higher, markets were looking a little more subdued ahead of the London open. On the one hand the astonishing US jobs market data was offering support, whilst on the other, a mixed picture over China’s economic recovery from covid-19 dragged on broader sentiment.
The UK pressing ahead with two-week quarantine measures on international arrivals is set to dampen the mood on the FTSE. The move is expected to devastate tourism, wrecking the chances of summer holiday plans reviving a sector which is already on its knees. The move effectively pours cold water on any hopes of reigniting the sector after the virus induced slump.
On the economic calendar, there is no high impacting data from US or UK today.
EUR has slipped back through $1.13 consolidating gains from the previous week, which saw the common currency gain 1.7% across the week and hit a 3-month high. German industrial production plunged by a wider than forecast -17.9% in April, highlighting the damage that covid-19 caused whilst adding pressure to the common currency. Attention will now turn to Eurozone sentiment data which is expected to show that morale slipped again in June. Christine Lagarde is also set to testify.
OPEC agrees to extend record output cuts
Oil struck a 3-month high overnight after OPEC+ announced that it would extend its current production cut deal, following a meeting on Saturday. The 9.7 million bpd output cut will be extended for at least another month. Whilst most countries taking part n the deal were willing to continue, poor compliance from some counties was causing discontent within the group.
Oil prices have effectively doubled across the month of May as OPEC+ regulates the supply side and reopening of economies boosts demand. However, prices haven’t ripped higher at the start of the week because the move was, too an extent already priced in. Oil is currently hovering around $40 pb mark, a 3-month high.
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