Despite Antiviral Hopes, US Dollar Hangs on Headlines
The optimistic Remdesivir tests provided support for the markets on Friday. However, despite that, the dollar closed last week negative and concerns around the pandemic are still strong.
This is largely due to the increasing cases, as macro data remains dismal.
With a light calendar scheduled for the day, the performance of the greenback will likely hang on technicals and political headlines.
EU Recovery Fund Finally Seen with Optimism
In Europe, debates over the EU’s coronavirus recovery fund kept the euro’s gains at 0.07% against the dollar last week.
Growing optimism could push euro higher today, should the greenback’s weakness prevail.
London Traders Keep a Close Eye on UK Data
The pound’s impressive 1.02% rally on Friday was attributed to gains over the UK’s housing indicator. This supported the sentiment on Friday’s close.
With a similar bullish trend continuing during Monday’s opening, the pound might remain near the 1.26 level ahead of UK retail sales. This is especially true as markets are expecting Brexit-related policy updates.
Asian Markets Mirror Positive Sentiment
The Asian market mirrored US sentiment last Friday. Sentiment experienced gains thanks to increasing iron and steel demand from China’s industrial activity.
According to this year’s Government Work Report, GDP in China is expected to return to 3% growth in Q2. This allowed the rally to continue this morning.
US Equities Driven by Stimulus Expectations, Corporate Earnings
Indices rose last week in the US as an increase in cases supported the health care and technology sectors. Meanwhile, firms reported positive earnings reports.
SPX500 gained +0.17% last week, whereas the Nasdaq outperformed once again at +1.76 at Friday’s close. The industrial index Dow Jones, however, ended the week on a negative footing, down 0.81%.
We expect risk sentiment to prevail this coming week amid additional stimulus expected by the Fed.
Gold Upbeat on Rising Tensions
Friday ended with some profit-taking for gold. Risk appetite was readily seen in stock indices.
The metal closed below the $1800,00 barrier after a 9-year high recorded last week.
Weekend headlines around phase two of a trade deal between the US and China failing, as well as tariff threats against France, support the prices of gold.
WTI Affected By OPEC+ Revision
A positive move on Friday saw oil climb back up over $40. This came amidst the IEA’s upward revision for crude oil demand to 8.1 million bpd.
WTI crude started off the week plummeting due to headlines that OPEC+ is set to ease record production cuts as coronavirus lockdowns lift.