Archives of “June 2020” month

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European shares end the session higher. German DAX leads the way

  
Analysis, Global Indices

German DAX +2.1%

The European shares of all closed higher with the German DAX leading the way with a gain of 2.13%. The Portuguese PSI 20 is the laggard with a 0.8% gain.

The final numbers are showing:
  • German DAX, +2.13%
  • France’s CAC, +1.39%
  • UK’s FTSE 100, +1.21%
  • Spain’s Ibex, +1.26%
  • Italy’s FTSE MIB, +1.86%
  • Portugal’s PSI 20, +0.8%
I the European debt market, the benchmark 10 year yields are ending the session mixed with investors fleeing the relative safe German and France in favor of Italy and Portugal.

Magnitude 7.7 earthquake hits Oaxaca, Mexico

  
  Analysis

Earthquake hits near the pacific coast of Mexico

Earthquake hits near the pacific coast of Mexico
Local reports on Twitter suggest strong shaking. There was earlier shaking today at a magnitude 4.9 but that appears it was just a tremor setting up for this earthquake.
Mexico earthquake reportsAn earthquake of 8.0 in Mexico 1985 killed at least 5000 people, it was located 350 km away.
The epicenter of this one appears to be closer to Oaxaca’s pacific coast, centered near Asunción Tlacolulita.
Update: The USGS early estimate is magnitude 7.7 (then updated to 7.4)
Mexico USGS map

USD/JPY threatens fall to six-week low

  
Analysis, Forex

Big turnaround in USD/JPY

A mix of risk-on has shifted into more of a dollar selloff.
It’s been a wild ride in USD/JPY today as the pair dropped on the Navarro story, then rebounded on the denial, then jumped on a positive risk tone and has now plunged. USD/JPY is now just pips away from the June low of 105.57.
Big turnaround in USD/JPY
At the moment support at that low is holding but a breakdown would clear the way for a test of 106.00, which was the early-May low.

WTO: Global trade slowdown this year not likely to witness worst-case scenario of 32% decline

  
Analysis, Economy

WTO provides their latest take on the global trade outlook

WTO
  • Trade would only need to grow 2.5% per quarter to reach optimistic scenario
  • Rapid government aid helped to avoid worst-case downturn in trade
  • Sees trade growth in 2021 more in the range of 5% to 20%
For some context, the WTO back in April envisaged global trade to fall somewhere between 13% to 32% on either a optimistic scenario or a worst-case scenario at the time.
There’s nothing much in this but it just adds to the narrative that the economic outlook set out back in March, April were slightly on the more pessimistic side of things. That said, it doesn’t take away the fact that we will still see dire conditions in the months ahead.

Eurozone June flash services PMI 47.3 vs 41.5 expected

  
Analysis, Economy

Latest data released by Markit – 23 June 2020

  • Prior 30.5
  • Manufacturing PMI 46.9 vs 45.0 expected
  • Prior 39.4
  • Composite PMI 47.5 vs 43.0 expected
  • Prior 31.9
The beats have been predicated by the French and German releases earlier – more so the former – as we see the euro area economy continue to display better conditions relative to the previous few months, finding some sense of stabilisation.
Looking at the details, output declined in both services and manufacturing again but the rate of contraction was reported to be markedly reduced for a second month running.
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