Gains Across All Major Bourses
Global markets began this week optimistic after better than expected US Jobs data were released last Friday which led to gains across all major bourses. The DXY took a slight reprieve after its eight-day consecutive beating where the index fell over 3%. USD weakness across the board saw GBPUSD move to monthly highs and break resistance at 1.2645 before being held back by the daily 200SMA.
In relation to reopening of economies worldwide...
In relation to reopening of economies worldwide, New Zealand PM Ardern has stated that all Coronavirus restrictions except from border closures will be lifted and the country will move to Alert Level 1 from midnight. PM Johnson has urged ministers to accelerate the reopening of the economy in order to avoid a mass of job losses as Chancellor Sunak warned that 3.5mln jobs could be lost if the hospitality sector remains closed over the summer. In addition to this the UK and EU will be looking to develop the current trade talks as the deadline for an extension to the transition period draws closer. PM Johnson also intends to change some of the terms of its Brexit withdrawal agreement in order to rectify defects from PM May’s plans.
WTI Crude Oil
WTI Crude Oil continues its bullish run after OPEC+ agreed to extend the output cuts for a month through to July. Saudi and Russia also emphasised that they want stronger compliance from other nations as WTI continues its attempt to recover from the plummet seen earlier on in the year. As a result, Saudi Arabia increased the prices of oil to Asia which was the largest price hike in two decades.
The rift between China and US
The rift between China and US appears to have subsided somewhat after US Trade representative Lighthizer stated that he feels good about the Phase one trade deal and the reports that the China was not honouring the soybean purchase were false. This comes as Lighthizer also stated that he wants a trade agreement with the UK as the next round of talks are set to commence on June 15th.
In the cryptocurrency space
BTCUSD continues to stay above $9,300 after falling from highs at $10,400 earlier last week whilst Ethereum remains supressed below $250 after breaking $200. Gold broke out to the downside from an Ascending triangle on the daily timeframe and tested $1,675/troy ounce before finding buyers at the level and moving higher. The outlook for Gold still remains bullish as USD continues to experience weakness across the board. Key levels to watch on Gold still remain at $1,750 followed by $1,765.
The highlight of the week will be the FOMC statement and press conference on Wednesday as Powell and his team will announce the Federal funds rate which is expected to remain unchanged. The focus will be on the forward guidance as the US attempts to tackle the aftermath of the crisis amidst the ongoing unrest in the nation.
Here is a breakdown of the high impact data releases this week.
14:45 ECB President Lagarde speaks. Markets to watch: EUR Crosses
13:30 Core CPI m/m & CPI. Market to watch USD Crosses
19:00 FOMC Statement, FED Funds Rate , FOMC Press Conference. Markets to Watch: USD Crosses
15:00 Prelim UoM Consumer Sentiment. Markets to watch: USD Crosses