On Thursday, appetites for risk decreased significantly due to the growing number of coronavirus cases in the world and in the United States in particular. Even good weekly data on the number of initial unemployment applications did not help.
Next week, neither in the U.S. nor in Europe, governments are not planning to provide financial support to companies. Until July 20, the U.S. Senate is on vacation, and in Europe the nearest EU meeting in Brussels on July 17-18. Therefore, next week the world economy will use the capital that it has at the moment. Will companies be able to hold out? Probably, the lack of incentives will have a negative impact on the decisions taken, and investors will move out of risk assets into the dollar or metals.
On Thursday, DAX closed at 12489 and lost 0.04%. The American market was more scared. The S&P500 index dropped by 0.88% to 3140.
The British pound has been growing all week long. But there’s some disturbing news on the market. Boris Johnson said that Britain will not negotiate a Brexit agreement with the European Union. Eventually, negotiations may stop if France and Germany do not make concessions. Because of the conflict, the pound will slow down. On Thursday, the pair GBP/USD approached the daily SMA200 at 1.12680 and started correcting down to the zone 1.26. Further movements will depend entirely on the progress of negotiations between the UK and the European Union.
Uncertainty remains in the oil market. It is still not clear when demand will recover. The economy seems to be recovering, but problems with rising COVID-19 infection rates can make adjustments to these plans very quickly. On Thursday the price of WTI oil fell below $40 per barrel after the publication of a significant increase in black gold reserves in the United States. Further growth is in big doubt.
What’s waiting for us today?
8.45 Industrial production in France for May
14.30 Producer price index in USA since the beginning of the year
19.00 Number of active drilling rigs in the USA
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