Data could keep optimism in check
|Further sanctions on China seem like an inevitability after comments from US secretary of state Mike Pompeo on Wednesday. Pompeo said that Hong Kong was no longer deemed autonomous from China in a move that saw a further escalation in tensions between the two superpowers.
Despite the growing animosity between Beijing and Washington markets on Wall Street and in Asia rallied. For today’s session markets are also looking positive with this week’s rally thanks to the optimism around the reopening of the US economy. The Dow jones added another 500+ points on Wednesday to finish the session above the key 25,000 level.
One thing that could keep this week’s optimism in check will be today’s raft of economic data, with another preliminary Q1 GDP reading from the US as well as the weekly initial jobless claims. The Q1 GDP is expected to show the figure remains little changed from previous predictions around with a contraction of around -5% expected. The initial jobless claims will yet again show that more than 2 million more Americans claimed unemployment support in the last week. US durable goods orders are also expected for release which are expected to show a fall of -19%.
There will be further calls for the media and the public to move on from the Dominic Cummings issue in the UK today. Wednesday’s appearance by the Prime Minister in saw him grilled by MP’s over many aspects of the government’s handling of the Coronavirus pandemic. The government will hope the launch of the UK’s new track and trace system will see that narrative change.
Such has been the strength of stock markets over the last few days that we have seen a selloff in the US dollar as we enter a very much risk on environment. However, with a raft of economic data today likely to remind investors that the economic outlook is particularly bleak it will be interesting to see if that position will change at all as we head towards the end of the shortened week.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.