Europe Remains Upbeat Despite US China Tensions
Fiona Cincotta July 23, 2020 7:27 AM
European bourses are pointing to a mildly positive start after hopes of more US stimulus and upbeat US earnings overnight are overshadowing rising Western tensions with China.
European bourses are pointing to a mildly positive start after hopes of more US stimulus and upbeat US earnings overnight are overshadowing rising Western tensions with China.
Geopolitical tensions continue to keep any gains in check as the orders the Chinese consulate in Houston to shut by Friday on spying accusations, whilst China plans to follow suit in the tit for tat moves which will see the US consulate in Wuhan closed.
The overriding fear here is that Trump will call off the Phase one trade deal as tensions with China escalate. Despite the tensions, the US Dollar continues to hover close to its all-time low with its eyes on the stimulus prize, inflation hedge gold also remains close to 2011 highs at $1870.
German consumer confidence jumps
The Euro is continuing its run higher as it enjoys its popularity boost brought about by the EU Recovery Fund. Data showed that consumer confidence in Germany jumped to -0.3, up from -9.4 in July and smashing expectations of -5. The surge in consumer sentiment is giving investors yet another reason to buy into the Euro. Data is the region surprising to the upside, flare ups in covid cases are being brought quickly under control and both the fiscal and monetary stimulus taps are turned on. What’s not to like?
US jobless claims improvements set to stall
Looking ahead US jobless claims will be in focus. Expectations are for claims to remain unchanged, stalling at 1.3 million. Continuing claims are expected to edge slightly lower to 17.067 million, down from 17.3 million. Whilst jobless claims have been steadily improving, the fear is rising that the numbers could soon start to deteriorate again as parts of the US sunbelt start to re impose lockdown measures to bring the rising coronavirus numbers under control. The US reported another 70,000 new daily cases on Wednesday.
FTSE Chart
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.