EU Stocks Found Support; While the AUD Strengthened

Equity Markets

The vaccine optimism continues to drive the momentum in the stock market. Global stocks edged higher on Tuesday buoyed by the heightened expectations of a vaccine sooner than later. European stocks also found support in a historic move when the EU leaders reached a pandemic package deal and budget.

Source: Bloomberg Terminal

Wall Street ended mixed despite vaccine updates and better-than-expected earnings reports. Nasdaq fell in the negative territory as tech stocks retreated from yesterday’s highs:

  • Dow Jones Industrial Average added160 points or 0.6% to 26,840.
  • S&P 500 rose by 5.5 points or 0.2% to 3,257.
  • Nasdaq Composite lost 87 points or 0.8% to 10,680.

On the earnings front, Coca-Cola Co and Philips Morris International reported earnings before the bell while Snap Inc reported its quarterly updates after the market close:

  • Coca-Cola Co’s share price rose by 2.3% to $47.20 on Tuesday despite a fall of 28% in net revenue to $7.2 billion and a decline in EPS by 32% to $0.41. The Company was optimistic about improving demand as lockdowns ease.
  • Philip Morris International share price rallied by 4.2% to $75.92. The Company reported earnings and revenue that beat analysts’ estimates:
  • Diluted EPS of $1.25, down by 16.1%; down by 12.1%. An adjusted diluted EPS of $1.29, down by 11.6%; down by 7.5%.
  • Net revenues down by 13.6%; down by 9.5%.
  • Snap Inc fell in extended-hours despite upbeat reports:
  • Daily Active Users increased by 17% year-over-year to 238 million
  • Second-quarter revenue increased 17% year-over-year to $454 million
  • Second-quarter operating cash flow improved 31% year-over-year to $(67) million

Currency Markets

In the FX space, the US dollar slipped against all major currencies on the back of broad optimism and amid a relatively subdued economic calendar.

Source: Bloomberg Terminal

The Aussie dollar emerged the best-performing currency in the G10 group. In the Asian session, the local currency was driven by a less-dovish RBA minutes and the possibility of the RBA lowering interest rates. In a speech about COVID-19, the Labour Market and Public Sector Balance Sheets, the Governor kept the door open for a rate cut. After struggling to rise above the 0.70 level, the AUDUSD pair bolstered higher near 15-month high above 0.71 level on the dollar weakness.

AUDUSD (Monthly Chart)

Source: GO MT4

The EURUSD pair rallied to 1.15 level as the EU leaders strike a historic deal to support the Eurozone economy.

EURUSD (Monthly Chart)

Source: GO MT4


The positive vaccine updates and OPEC+ output cuts have boosted crude oil prices despite a bearish oil report. API Weekly Crude Oil Stock increased to 7.544M in July 17 from previous -8.322M. As of writing, WTI Crude oil (Nymex) and Brent Crude (ICE) were trading higher around $41.96 and $43.90, respectively. 


Gold rallied to the highest level since 2011 despite the overall positive risk sentiment. Given the ongoing uncertainty, investors are hedging with safe-haven assets. As of writing, the XAUUSD pair is currently trading at $1,843.

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