Stocks Start Week With Gains
Fiona Cincotta July 6, 2020 7:46 AM
Economic recovery optimism is in full swing as the new week kicks off overshadowing concerns of rising covid numbers and second wave fears.
Economic recovery optimism is in full swing as the new week kicks off, driving Asian and European markets firmly higher whilst overshadowing concerns of rising covid numbers and second wave fears.
Even as the coronavirus statistics show concerningly high increases the mood in the market remains bullish as investors place firm belief in the view that a revival in Chinese activity will help sustain global economic growth.
GBP under pressure amid negative rates talk
The Pound is a notable decliner versus the Euro in early trade after a report surfaced that BoE Governor Andrew Bailey and Co are still seriously considering negative interest rates in the UK in order to boost the economic recovery. Negative rates would pressurise already squeezed lending margins at the banks. The banks could lag other sectors on the open.
This weekend saw the UK hospitality sector reopen with pubs, restaurants and har dressers among those that could reopen. With more and more of the economy reopening the economic rebound should start to gather pace in the UK after a very slow few month.
UK construction PMI is due to show that the contraction in the sector slowed, increasing from 28.9 to 47.
The final US service sector PMI is also due late today. Expectations are also for the contraction to have slowed. Meanwhile the closely watched ISM non manufacturing PMI is expected to reach 50, the level which separates expansion from contraction.
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