Archives of “August 5, 2020” day

rss

Japan economy minister: The second major coronavirus wave has arrived

  
  Analysis

Is this the start of some acknowledgement by the government to take more serious actions to curb the virus spread?

Nishimura’s remark above could be a token remark but on the other end of the spectrum, it could represent some potential change in heart by the government.

The latest virus resurgence in Japan has already well exceeded the initial outbreak and is starting to take a toll on medical capacity across the country. The fear is that the virus situation may escalate further and medical workers will be overburdened.
That may lead to deaths increasing in the coming weeks and that won’t be a pretty sight.
In any case, as much as the government wants to promote the reopening of the economy, the health crisis getting worse will stifle any potential for a return to pre-virus levels as the fear of the virus itself will play a major role in limiting consumption activity.

Japan

Eurozone July final services PMI 54.7 vs 55.1 prelim

  
Analysis, Economy

Latest data released by Markit – 5 August 2020

  • Composite PMI 54.9 vs 54.8 prelim
The preliminary release can be found here. That is more or less close to initial estimates as the final report reaffirms that the euro area economy observed a modest rebound in July, as domestic demand improves following the easing of virus restrictions.
That said, the outlook remains relatively uncertain still with labour market conditions a key area to focus on in the latter stages of Q3 and in Q4, with government stimulus measures to wear off. Not to mention, the potential for a secondary virus outbreak in the region.
Markit notes that:

 

“Eurozone service sector business activity rebounded in July to grow at a rate not exceeded for over two years. France and Germany enjoyed especially strong gains though renewed growth was also recorded in Spain and Italy as COVID-19 containment measures continued to be relaxed.

“Combined with a surge in manufacturing production, the renewed expansion of the service sector bodes well for the economy to rebound in the third quarter after the unprecedented slump seen in the second quarter.

“Whether the recovery can be sustained will be determined first and foremost by virus case numbers, and the recent signs of a resurgence pose a particular risk to many parts of the service sector, such as travel, tourism and hospitality. However, even without a significant increase in infections, social distancing measures will need to be in place until an effective treatment or vaccine is available, dampening the ability of many firms to operate at anything like pre-pandemic capacity, and representing a major constraint on longer-run economic recovery prospects.

Why to stay bullish EUR/USD this quarter

  
Analysis, Forex
  • Worries over virus developments outside the US have started to surface, so is now the time to get EUR negative again? We doubt that we will witness the large-scale closures seen during the spring and yesterday’s price action suggests that one probably needs to look for US rate rises and/or tech outperformance to get very negative on EUR/USD short term” 
  • “In our base case that Fed delivers on its inflation hints with enhanced forward guidance in September, a reflation narrative is set to keep USD under pressure in Q3 and make a test of new year-highs in EUR/USD the dominating risk into the autumn. If that base case plays out, it would also spell good news for commodity currencies and in particularly the NOK enjoying a large beta to both commodities and European equities. A key downside risk to EUR/USD and commodity currencies is if Trump scraps the trade deal amid the current China software lash and/or election stress” 
Comments from Danske on the euro, this via eFX (For bank trade ideas, check out eFX Plus)

Major indices close higher. The NASDAQ closes at a new record high again

  
Analysis, US Market
#  #  #  #

Late day rally takes the indices to new session highs

the major indices rallied into the close and as a result are closing near/at their highs for the day. The Dow industrial average led the way today with a 0.62% gain. The S&P index and NASDAQ index each closed up around 0.35%.

  • The NASDAQ closed at yet another new record high and have been up for 5 consecutive days. For the year the NASDAQ is up 21.8%
  • The S&P closes lesson 3% from the all-time high
  • The S&P index and Dow industrial average have now been up for 3 consecutive days
The final numbers are showing:
  • S&P index rose 11.9 points or 0.36% at 3306.51. The close was just off the session highs at 3306.84. The low reached 3286.37
  • NASDAQ index rose 38.37 points or 0.35% at 10941.16. The high price reached 10941.90. The low extended to 10852.89
  • Dow industrial average rose 164.07 points or 0.62% at 26828.42. It’s high price reached 26832.72. The low price extended to 26597.82
Although there is no coronavirus deal, just before the close Senate Majority Leader Mitch McConnell said he could support an extension of the US$600 unemployment benefit it Trump supports it.
After the close Disney reported adjusted earnings-per-share of $0.08 vs. expectations of $-0.64. The revenues however came in light at $11.78 billion vs. expectations of $12.39 billion. Disney plus subscribers told 57.5 million vs. expectations of 59.4 million. Disney shares initially move lower but are now trading up 2.46% $120.18.
Go to top