Risk appetite waned the past week as the number of new global COVID-19 cases continued to surge. The outbreak in the US is continuing to worsen, The country recorded 45,242 new cases of COVID-19 on Friday, the largest single-day increase of the pandemic and thus several states took steps back from efforts to ease restrictions on businesses. Texas and Florida ordered bars to close down again. Global equities sank and safe-haven assets like U.S. Treasuries and gold closed the week higher.
So the main driver for the markets will remain the pandemic’s picture evolution. Will the number of new cases in the US continue to surge pushing sates to take further steps towards going backwards to stricter measures? And although the Euro zone seems like past the worst of the economic crisis caused by the coronavirus pandemic, fears of a second wave of infections are still in the air, and may if intensified weigh on sentiments. European Central Bank President Christine Lagarde urged authorities on Friday to prepare for a possible second wave.
Besides, investors will look to a raft of U.S. data this week - including reports on employment, consumer confidence and manufacturing - for clues on whether a nascent rebound in the U.S. economy remains intact. Most importantly the NFP report on Thursday which is expected to reveal a significant rise in the employment rate despite the expected rise in jobless claims which is most probably due to the jump in claims in California, which together with Texas and Florida, has seen a surge in novel coronavirus cases.
Also the minutes from the Fed meeting in June due on Wednesday, are expected to attract market’s participants attention, those will focus on whether policymakers discussed the yield curve control and changing the Fed’s guidance.
A barrage of data is due for release out of the UK this week as well. Most notably the revised estimates of first quarter GDP on Tuesday and the final June PMIs on Friday.
Below are the most important data point of the week:
Monday, June 29, 2020:
- US Pending Home Sales (MoM) (May) (14:00 GMT)
Tuesday, June 30, 2020:
- China Manufacturing PMI (Jun) (01:00 GMT)
- UK GDP (YoY) (Q1) (06:00 GMT)
- UK GDP (QoQ) (Q1) (06:00 GMT)
- EU CPI (YoY) (Jun) (09:00 GMT)
- Canada GDP (MoM) (Apr) (12:30 GMT)
- US CB Consumer Confidence (Jun) (14:00 GMT)
Wednesday, July 1, 2020:
- China Caixin Manufacturing PMI (Jun) (01:45 GMT)
- German Manufacturing PMI (Jun) (07:55 GMT)
- German Unemployment Change (Jun) (07:55 GMT)
- UK Manufacturing PMI (Jun) (08:30 GMT)
- US ADP Nonfarm Employment Change (Jun) (12:15 GMT)
- US ISM Manufacturing PMI (Jun) (14:00 GMT)
- Crude Oil Inventories (14:30 GMT)
- FOMC Meeting Minutes (18:00 GMT)
Thursday, July 2, 2020:
- US Initial Jobless Claims (12:30 GMT)
- US Nonfarm Payrolls (Jun) (12:30 GMT)
- US Unemployment Rate (Jun) (12:30 GMT)
Friday, July 3, 2020:
- Australia Retail Sales (MoM) (May) (01:30 GMT)
- UK Composite PMI (Jun) (08:30 GMT)
- UK Services PMI (Jun) (08:30 GMT)
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