June starts with good news on the markets. First of all, we can already see that the U.S. economy is coming out of recession and starting to gain momentum a little bit. Of course, there is also the negative. Protests in the U.S. have hit the retail hard. Big stores like Wallmart are closing their branches all over the country because of looting.
Summer is usually a quiet period in the markets, but the summer of 2020 is likely to be special. The difficult situation with the pandemic, the growing pressure between China and the US, the strongest protests in the US in recent years are causing irreparable harm to the entire world economy. Investors are still optimistic and are trying to buy. On Monday, the S&P500 index is still above 3000 at 3060. This gives us hope that we will go further upwards after all.
Problems with the protests in the USA and the weak dollar plays into the hands of the Euro owners. However, this week will be very busy with various events and macroeconomic statistics. The ECB statements will be very important for the Euro as the problems with the Bundesbank have not gone anywhere yet. On Monday the Euro traded at 1.1131 and came to a strong resistance level at 1.1140. The Bears are unlikely to let go of this situation. The current growth is very fragile and the trend may well turn down.
The Australian dollar has been rising for the third consecutive week. The country has coped with the coronavirus pandemic, and losses in GDP will make very small figures. The forecast for the Australian economy is positive, especially China is recovering rapidly, and Australia is the main exporter of raw materials. The Australian dollar broke through SMA200 at 0.6653 and rushed up. Now we need to consolidate above that level in order to continue the movement.
Gold is steadily approaching $1800 per ounce. Due to problems in the USA, investors feel that safe haven assets should enjoy popularity. Global stimulation of the economies of the world’s major banks is still increasing the demand for the precious metal. In the near future gold will try to make a retest of 1750 per ounce and probably will try to consolidate higher.
What’s waiting for us today?
06.30 Decision on the interest rate of the Bank of Australia.
09.00 Change in the number of unemployed in Spain.
22.30 Weekly crude oil reserves in USA
Important Notes on This Publication:
The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.