By Deepta Bolaky
 @DeeptaGOMarkets

Equity Markets

Global stocks advanced higher on the early signs of a slowdown in the number of daily coronavirus cases in the US and have recouped the losses made for the year.

European stocks performed well despite the preliminary reading of the second quarter of the UK GDP showing a contraction of 20.4%, marking the second consecutive quarterly decline. Wall Street rallied driven by the outperformance of mega-cap tech stocks. Major US equity indices ended in positive territory. 

• The Dow Jones Industrial Average added 290 points or 1.1% to 27,977.
• S&P 500 added 47 points or 1.4% to 3,380.
• Nasdaq Composite gained 229 points or 2.1% to 11,012.

Source: Bloomberg

Currency Markets

In the FX space, major currencies were stronger against the greenback. The British Pound struggled to gain momentum against the US dollar, unlike its peers following mixed macro data.

Source: Bloomberg

• Australia: The Westpac-Melbourne Institute Index of Consumer Sentiment fell 9.5% to 79.5 in August from 87.9 in July. The scale of the fall comes as a major surprise. At 79.5, the Index is back near the extreme low of 75.6 seen back in April when Australia entered a national lockdown.

• New Zealand: The RBNZ kept Official Cash Rate (OCR) on hold at 0.25% but agreed to expand their Large Scale Asset Purchase programme from $60 billion to $100 billion. 
• UK: A series of macro data was released on Wednesday. The Industrial and Manufacturing index came above forecasts in June. However, UK gross domestic product (GDP) is estimated to have fallen by a record 20.4% in Quarter 2 (Apr to June) 2020, marking the second consecutive quarterly decline after it fell by 2.2% in Quarter 1 (Jan to Mar) 2020. There have been record quarterly falls in services, production and construction output in Quarter 2.
• United States: The CPI was up 1%, while the core yearly reading printed above expectations at 1.6%.

Commodities

Crude oil prices edged higher on bullish inventory reports. The US Energy Information Administration (EIA) revealed on Wednesday a decline of 4.5 million barrels in crude oil stock in the week ending August 7th. WTI settled above a key level for the first time since January.

Source: Bloomberg

As of writing, WTI Crude oil (Nymex) and Brent Crude (ICE) were trading higher around $42.65 and $45.40 respectively.

Gold

Gold plunged from recent record highs and slipped the most in seven years. As of writing, the XAUUSD pair is currently consolidating around the $1,930 mark. A peak or a temporary retracement? The positive vaccine updates and the broad optimism have sent gold tumbling on Wednesday. After a great run to the upside, some correction was inevitable.

However, the virus woes, ongoing fiscal support, geopolitical tensions, uncertainty of the global economic outlook still favours the demand for the haven asset.

By Deepta Bolaky
 @DeeptaGOMarkets

Key upcoming events

• Consumer Inflation Expectations, Full Time Employment, Employment Change and Unemployment Rate (Australia)
• Harmonized Index of Consumer Prices (Germany)
• Jobless Claims (US)

Friday, 14 August 2020  Indicative Index Dividends Dividends are in Points
ASX200	WS30	US500	US2000	NDX100	CAC40	STOXX50
0	0	0.248	0.234	1.067	0	0
ESP35	ITA40	FTSE100	DAX30	HK50	JP225	INDIA50
0	0	0	0	1.851		0

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