It will be another busy week ahead with investors gearing up for virus updates, geopolitical tensions, key economic data and the FOMC meeting. The global number of coronavirus cases crossed 16 million this weekend and the US is among the worst-hit countries. Much attention will remain on the spread of the virus and the economic hit from the pandemic.
United States
Given the alarming situation on the virus front in the US, investors are eagerly waiting for the next round of stimulus. While Congress is still struggling to finalise the next stimulus package, the attention will switch to the Federal Reserve for guidance. Market participants are not expecting any policy changes this Wednesday, but are looking for the comments from the Fed on the state of the US economy in the face of the resurgence of virus cases. The preliminary GDP figures would also be heavily eyed as the US economy is expected to contract by approximately 35% – the biggest contraction on record.
Eurozone
It will be a relatively muted week for the Eurozone. The highlights will be the IFO surveys on Monday. Europe made history last week after the announcement that the leaders of the European Union agreed on a Recovery Package and European Budget. In the middle of a crisis, Europe shows that they are standing together despite their disagreements and are jointly fighting for the recovery of the economies. Amid a lack of economic drivers, we expect the renewed stability in Europe to continue to positively drive the European markets.
UK
The absence of data and notable Brexit-related updates will put downward pressure on the British Pound compared to its peers.
Australia & China
In Australia, Victoria had its deadliest weekend to date during the pandemic. Despite the rising number of cases and the tensions between the US and China, the Aussie dollar has been on a rally on the back of some broad optimism and a less-dovish RBA. On the economic front, Aussie Inflation data will be closely watched and well as China’s PMI figures.
Equity Markets
Investors will remain focused on three main factors: geopolitical tensions, the spread of the virus and the amount of stimulus to drive the stock market.
At the same time, attention will also be on the earnings season with more of the FAANG group of companies reporting their quarterly earnings. Facebook, Apple, Amazon and Alphabet are among the big giants to report this week.
Commodities
Oil
Crude oil prices are stable around familiar levels but remain trapped by bearish oil reports and the mounting number of coronavirus cases. The improving fundamentals are overshadowed by the uncertain demand outlook. We expect traders to keep monitoring weekly COVID-19 infections to gauge oil demand.
Gold
Gold is on a rally – the XAUUSD pair is trading around the highest levels seen since September 2011. Given the ongoing uncertainty and geopolitical tensions, investors are hedging with safe-haven assets. As of writing, the XAUUSD pair is currently trading above a key psychological level of $1,900.
Key Events Ahead
Monday
- RBA’s Kent Speech (Australia)
- All Industry Activity Index and Leading Economic Index (Japan)
- IFO – Business Climate, Current Assessment and Expectations (Germany)
- Durable Goods and Nondefense Capital Goods Orders (US)
Tuesday
- Total Filled Jobs (New Zealand)
- S&P/Case -Shiller Home Price Indices and Consumer Confidence (US)
Wednesday
- RBA Trimmed Mean CPI, and Consumer Price Index (Australia)
- ZEW Survey – Expectations (Switzerland)
- Pending Home Sales, Fed Interest Rate Decision, Monetary Policy Statement and FOMC Press Conference (US)
Thursday
- Building Permits (New Zealand)
- Retail Trade and Large Retailers’ Sales (Japan)
- Building Permits (Australia)
- Gross Domestic Product, Unemployment Rate and Harmonized Index of Consumer Prices (Germany)
- KOF Leading Indicator (Switzerland)
- Economic Bulletin, Consumer Confidence, Business Climate and Unemployment (Eurozone)
- Core PCE, Jobless Claims, and Gross Domestic Product (US)
Friday
- ANZ – Roy Morgan Consumer Confidence (New Zealand)
- Jobs/Applicants Ratio, Unemployment Rate and Industrial Production (Japan)
- Non-Manufacturing PMI and NBS Manufacturing PMI (China)
- Retail Sales (Germany)
- Real Retail Sales (Switzerland)
- Consumer Price Index and Gross Domestic Product (Eurozone)
- Core PCE, Personal Income & Spending, Chicago Purchasing Managers’ Index and Michigan Consumer Sentiment Index (US)
| Tuesday, 28 June 2020 Indicative Index Dividends Dividends are in Points |
||||||
| ASX200 | WS30 | US500 | US2000 | NDX100 | CAC40 | STOXX50 |
| 0 | 0 | 0.038 | 0.007 | 0 | 0 | 0 |
| ESP35 | ITA40 | FTSE100 | DAX30 | HK50 | JP225 | INDIA50 |
| 0.402 | 0 | 0 | 0 | 0 | 0 | 0 |
