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• The Week Ahead 29th June – 3rd July 2020

The Week Ahead 29th June – 3rd July 2020

Market Recap

Equities had another down day last Friday, while the VIX reclaimed 35 to the upside, as the continued rise in COVID cases in key states such as Texas has begun to see policymakers walk back on reopening plans as hospitals begin to reach capacity. 

Internally, financials and communications led the losses with the former suffering from the stress tests and the latter getting weighed on heavy as corporates begin boycotting ads on large tech platforms (FB, TWTR, GOOGL). 

Market Outlook for Today

Asian stock markets began this week lower across the board with sentiment dulled, due to a continued focus on the rising virus infection rates. In the US, this has forced some key states to back-pedal on their reopening efforts with California, Texas and Florida imposing new restrictions, while the global death toll from the pandemic has surpassed the half million mark.  

ASX 200 (-2.2%) was dragged lower with energy underperforming the broad weakness seen across Australia’s sectors aside from gold miners which stayed resilient on the safe-haven play, and Nikkei 225 (-2.3%) was pressured after weaker than expected Retail Sales data and with the number of new infections in Tokyo rising to the most since the removal of the state of emergency declaration.  

Visiting the currencies market, one of the top indicators for the overall movements of major movers would be the USD index. The index is seen to be trading lower today, as the surge of coronavirus cases in the largest populated US states forced a reversal of their reopening agenda, which the USD’s major counterparts benefitted from, with the EUR/USD benefiting from a bounce back around its 200-Hour MA level at the 1.1250’s psychological level. 

Overview for the Week Ahead

The EUR and GBP will continue eyeing EU-UK Brexit negotiations. The two sides have until tomorrow to decide on whether to extend the transition period. Another key fundamental theme to keep a close eye on, are the liquidity conditions and the Fed’s balance sheet. The US Balance Sheet has now shrunk over a weekly basis twice in a row. 

Today’s High Impact Events

The times below are GMT+3

Monday 29th June

• 12.30pm – BOE Governor Bailey Speech 

Potential instruments to Trade: GBP Crosses, AUD crosses, Gold.

• 3.00pm – Germany Harmonized Index of Consumer Prices  

Potential instruments to Trade: EUR crosses.

Tuesday 30th June

• 9.00am – UK Gross Domestic Product (GDP) 

Potential instruments to Trade: GBP crosses, FTSE.

• 12.00pm – Eurozone Consumer Price Index (CPI) 

Potential instruments to Trade: EUR crosses.

• Undisclosed time – US Chair Powell and Treasury Secretary Munchin Speeches.  

Potential instruments to Trade: USD crosses, Gold. 

Wednesday 1st July

• 10.55am – Germany Unemployment Rate  

Potential instruments to Trade: EUR crosses.

• 3.15pm – US ADP Employment 
• 5.30pm – US ISM Manufacturing PMI 
• 9.00pm – US FOMC Minutes  

Potential instruments to Trade: USD Crosses, Gold.

Thursday 2nd July

• 3.30pm – US Non-Farm Payrolls (June) 
• 3.30pm – US Average Hourly Earnings 
• 3.30pm – US Unemployment Rate  

Potential instruments to Trade: US indices, USD crosses, Gold.

Friday 3rd July

There are no high impact events.

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