By Deepta Bolaky
The World Health Organization reported a one-day high for global cases Saturday of 212,326. Investors will likely continue to evaluate the improving economic data, positive vaccine developments, massive fiscal stimulus, ultra-low levels of interest rates and central banks interventions against the increasing global coronavirus cases which could derail the path of the economic recovery.
The week ahead will be relatively quieter with a few key data releases across the week.
JOLTS Job openings, Jobless Claims and ISM PMIs will likely stand out. Markets will likely continue to monitor the labour market for signs of improvement. Given that central banks have been pivotal in supporting the financial markets, Fed speech by the Vice-Chair Randal Quarles on Tuesday will likely gather some attention.
The RBA Interest Rate Decision and Statement will be the main event for the Australian markets. The RBA is widely expected to keep current policy settings and the interest rate at 0.25%. The attention will be mostly on the rate statement. The Antipodean currency will likely remain at the broader sentiment of the markets and the spike in Victorian Covid-19 cases.
Retail Sales figures and Germany’s Factory Orders and Industrial Production will stand out in a subdued week. On Wednesday, the European Commission will release economic growth forecasts which could impact the Euro.
A muted week for the UK on the economic front but we expect Brexit-related developments to gather much attention with another round of talks scheduled this week.
The global stock market has outperformed in the second quarter supported by the extremely loose monetary policies and massive government spending plans. Those intervention policies will likely continue to persist in the near term which is fuelling the confidence in holding riskier assets. Even though from a technical side, global stocks may be poised for more gains, the threat from the continuing spread of the virus cannot be ignored.
Ahead of the earnings season which will kick-start in a week, the immediate attention will probably be on the spike of COVID-19 cases.
Last week, the oil market found some support on the economic recovery narrative and bullish inventory reports:
We expect traders to keep monitoring weekly reports and COVID-19 infections to gauge oil demand.
As risk sentiment improves following upbeat economic data and positive vaccine updates, Gold pared some of its recent gains. However, the rising number of virus cases and the risk of a second wave of infection remains the major concern that will keep supporting the precious metal.
By Deepta Bolaky
|Tuesday, 07 June 2020
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