Archives of “July 16, 2020” day

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European shares end the session with mixed results

  
Analysis, Global Indices
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Italy and Portugal indices move higher

the major European indices are ending the session with mixed results. Germany, France, UK and Spain show declines while Italy and Portugal eked out gains. The closes are showing:

  • German DAX, -0.43%
  • France’s CAC, -0.42%
  • UK’s FTSE 100, -0.62%
  • Spain’s Ibex, -0.2%
  • Italy’s FTSE MIB, +0.3%
  • Portugal’s PSI 20, +0.95%
Italy and Portugal indices move higher_
In the European debt market, benchmark 10 year yields fell across the board with UK yields down the most at -2.8 basis points.
European 10 year yieldsIn other markets as London/European traders look to exit:
  • spot gold $-4.25 or -0.23% $1806.05. The high for the day reached $1813.48. The low extended to $1802.97
  • WTI crude oil futures fell $0.19 or -0.46% to $41.01. It’s high price reached $41.18 while the low extended to $40.60. The September contract is currently down $0.21 or -0.51% of $41.19
In the forex market,
  • GBPUSD. The GBPUSD is trading at new session highs in the currently hourly bar. In the process, the price has moved back above its 200 and 100 hour moving average. That tilted the bias back to the upside in what has been an up and down market over the last 7 or so trading days. On the topside a trendline connecting highs from this we currently comes in at 1.2634. The high from yesterday reached 1.26487. The high for the week on Monday reached 1.26652.
  • EURUSD: The EURUSD moved higher in the London session after finding support buyers near the 38.2% retracement of the move up from the Friday low at 1.13759. The high price reached 1.1441. The high price from yesterday reached 1.14512. There is close support at 1.14223 area

ECB leaves rates unchanged, as expected

  
  Analysis
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ECB continues to reiterate stands ready to adjust all of its instruments

ECB continues to reiterate stands ready to adjust all of its instruments
  • Full statement
  • Prior statement
  • Interest rates to remain at present or lower until it has seen inflation outlook robustly converge to a level sufficiently close to but below 2% within its protection horizons (repeat)
  • No change to rate tiering multiplier
  • Will continue purchases under PEPP with a total envelope of 1,350B euros
  • Will continue to fully invest maturing securities at least through end-2022
  • PEPP will run at least through end of June 2021
  • The ECB cites ‘very high takeup’ of TLTRO-III
  • In its June forecast the ECB saw GDP down 8.7% in 2020 and up 5.2% in 2021
There are no changes here whatsoever. The euro chopped around 1.1400 on the release but has ticked up to 1.1410 since.

Nikkei 225 closes lower by 0.76% at 22,770.36

  
Analysis, Global Indices
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A down day for Asian stocks

Nikkei 16-07

A poor day for Asian equities as profit-taking activity was the reason most alluded to for the drop after the Nikkei also touched a one-month high yesterday, not to mention the slump in Chinese equities as well.

Tokyo reporting a daily record of 280 new virus cases added to the softer tone in general too. The mood in US futures also isn’t helping, with E-minis seen down 0.4% currently.

The Hang Seng is down 1.1% while the Shanghai Composite is seeing losses of 2.3% now.
In the currencies space, this is seeing the dollar keep mildly firmer but nothing too significant as trading ranges remain relatively modest for the time being.

IMF’s Georgieva: Rising global debt levels are a serious concern

  
  Analysis
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Comments by IMF chief, Kristalina Georgieva

Kristalina Georgieva
  • But warns against premature withdrawal of fiscal support
  • Monetary policy should remain accommodative
  • Global economy is “not out of the woods yet”
  • Second major virus wave could case further disruptions
  • Job losses, bankruptcies, industry restructuring poses significant challenges

Some token remarks as a whole, but the headline comment is going to be an issue that is likely reverberate across politics and markets in the decade to come.

Regardless, these high debt levels aren’t going anywhere and when the next crisis comes along, we’ll be back here talking about the same thing with zero lessons learned.

China Industrial Production +4.8% y/y (expected 4.8%) Retail Sales -1.8% y/y (expected 0.5%)

  
  Analysis
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China activity data for June 2020

  • Industrial Production +4.8% y/y vs. expected 4.8%, prior was 4.4%
  • industrial production YTD -1.3% y/y vs. expected -1.5%, prior was -2.8%
  • Fixed Assets (excluding rural) YTD -3.1% y/y vs. expected -3.3%, prior was -6.3%
  • Retail Sales -1.8% y/y vs. expected 0.5%, prior was -2.8%
  • Retail Sales YTD -11.4% y/y vs. expected -11.2%, prior was -13.5%

more to come

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