Stockmarkets United States of America
USD is strengthening against GBP and JPY but weakening against EUR.
US investors are focused on the worsening situation with coronavirus in the country. Currently, the number of patients continues to increase at the fastest pace in the world and has already exceeded 2.6 million people. The worse situation is in the states of California and Texas, where the authorities were forced to cancel the planned medical procedures to free up resources for the treatment of coronavirus patients. Further deterioration of the situation in the southern United States may lead to the introduction of new economic restrictions. During the day, investors are waiting for the publication of data on unfinished real estate transactions. It is expected that their volume can grow by 18.9%, which will support USD.
EUR is strengthening against its main competitors – JPY, GBP, and USD.
EUR is growing amid positive inflation data in Germany. For June, a rise in the consumer price index exceeded market expectations. The indicator increased from –0.1% to 0.6% MoM and from 0.6% to 0.9% YoY. Experts note that significant growth has occurred in the catering and cosmetic services sector. Companies involved in these businesses were forced to incur additional costs associated with ensuring customer safety during the coronavirus epidemic. EU inflation data will be published on Wednesday.
GBP is weakening against its main competitors – EUR, JPY, and USD.
In the morning, GBP tried to grow amid statements made by Prime Minister Boris Johnson, who promised to spend tens of billions of pounds to support the economy, primarily through infrastructure projects, the construction of new roads, schools, and hospitals. The first part of the plan is to allocate 1B pounds to 50 major school construction projects over the next 10 years, and other 560M pounds to repair existing school facilities. Other details of the British economic recovery program Johnson will reveal on Tuesday. However, the strengthening of GBP was short-termed, and by now, it is rapidly weakening since investors are waiting for tomorrow’s publication of the UK GDP data, which may be negative.
JPY is strengthening against GBP but weakening against USD and EUR.
Pressure on JPY is provided by poor data on retail sales for May. The index decreased by 12.3% YoY, which exceeded market expectations (–11.6%). The second consecutive two-digit reduction in the indicator increases the risk that the world’s third largest economy may remain in recession longer than expected, and its recovery may be slower. The sales of clothing and cars declined most of all. On Tuesday, investors will focus on the publication of May data on industrial production in Japan, which also promises to decline by 5.6%.
AUD is strengthening against GBP, JPY, and USD but weakening against EUR.
Today, investors are monitoring the situation with coronavirus in the country. It was previously believed that Australia had virtually defeated the epidemic on its territory and began to ease social restrictions. But from the end of last week, the number of infected people began to grow, and today it has almost doubled, reaching 81 patients, which raised investors’ concerns about the start of the second wave of the pandemic. The authorities of Victoria, which accounted for the majority of new infections, have already announced the need to tighten social distance rules, which could negatively affect the region’s economy.
Oil prices are trying to grow.
The price is supported by positive German inflation data, which give hope for a revitalization of the European economy, as well as data from the Baker Hughes report, which recorded a new reduction in the number of active drilling rigs in the United States to 188 units, despite the intention of some participants in the shale industry to resume oil production soon. However, a serious surge in prices is being hindered by the second wave of the US coronavirus epidemic, which threatens to slow the recovery of the US economy and negatively affect the consumption of petroleum products.