Market watch - 10th July 2020
US jobless claims came in slightly better than expected at 1.31 million rather than 1.37 million jobs, which initially supported the US equity markets. However, later in the day, as negative reports about the virus spread in the US continued to appear, the equity markets sagged, and the dollar gained ground.
Canadian housing starts beat expectations of 185k and were posted at 212k, helping to support the Loonie, which made early gains against the US dollar. Oil moved lower later in the day, and this helped USD/CAD retest resistance levels in early London trading.
The market is watching the recent EU meetings very closely and showing its concern that the EU may well miss its self-imposed deadline of next week to agree its support package. Yesterday, the euro weakened by 0.5% against sterling and the US dollar.
Sterling continued to push higher in early trading yesterday on a mixture of positive sentiment after the Chancellor’s mini budget and negative sentiment towards the euro and US dollar. The talks over the new UK-EU trade deal have finished for this week and there isn’t any UK economic data for release today, so we will have to leave it to headlines regarding the pandemic to move us. Technically speaking, GBP/USD is approaching resistance levels, which may prove difficult to breach.
Initially, the AUD continued to squeeze higher but slumped lower later in the day and overnight, as Chinese equities moved lower on the day, ending an 8-day winning streak. Next week, we have Australian business confidence and jobs data for release.