Uncertainty in Financial Markets (Weekly Review)


Last week we observed no significant increase in volatility or large-scale movements in the foreign exchange market. The increase in cases of coronavirus in the USA negatively affected risky assets, and as a result the growth of stock indices was replaced by a decrease, which, however, was rather limited. At the same time, positive statistics on the PRC contributed to outbursts of “risky” sentiments.

Despite periodic sales on stock exchanges, the losses of the AUD, although retreating from current highs, are still limited by support at 0.6850. Nevertheless, the bears do not abandon attempts to break through it, which will entail a deeper correction, and such a development of events at this stage looks most likely.

Whatever sentiment prevails in the stock markets, gold remains the investor's favorite. Continuing growth, its quotes reached resistance in the region of $1,775 per ounce, but since the metal was traded here almost eight years ago, current levels may be attractive for taking profits on long positions, while large-scale movement amid the efforts of central banks to provide liquidity is unlikely to be expected.

Schedule for this week:

Tuesday, June 30

12:00 (09:00 GMT) - Eurozone. Consumer Price Index (CPI);
12:00 (09:00 GMT) - Eurozone. Core Consumer Price Index (CPI);
15:30 (12:30 GMT) - Canada. GDP;
17:00 (14:00 GMT) - USA. Treasury Secretary Steven Mnuchin Speaks;
19:30 (16:30 GMT) - USA. Fed Chair Powell Testifies.

Wednesday, July 1

01:30 (22:30 GMT) - Australia. AIG Manufacturing Index;
01:45 (22:45 GMT) – New Zealand. Building Consents;
04:45 (01:45 GMT) - PRC. Caixin Manufacturing Purchasing Managers Index (PMI);
10:55 (07:55 GMT) - Germany. Unemployment Rate;
10:55 (07:55 GMT) - Germany. Employment Rate;
15:15 (12:15 GMT) - USA. ADP Nonfarm Employment Change;
16:45 (13:45 GMT) - USA. Markit Manufacturing Purchasing Managers Index (PMI);
17:00 (14:00 GMT) - USA. ISM Manufacturing Purchasing Managers Index (PMI);
21:00 (18:00 GMT) - USA. FOMC Meeting Minutes.

Thursday, July 2

04:30 (01:30 GMT) - Australia. Trade Balance;
09:30 (06:30 GMT) - Switzerland. Consumer Price Index (CPI);
15:30 (12:30 GMT) - USA. Nonfarm Payrolls (Jun);
15:30 (12:30 GMT) - USA. Unemployment Rate;
15:30 (12:30 GMT) - USA. Average Hourly Earnings;
17:00 (14:00 GMT) - USA. Factory Orders.

Friday, July 3

03:30 (00:30 GMT) - Australia. Retail Sales;
04:45 (01:45 GMT) - PRC. Caixin Services Purchasing Managers Index (PMI);
11:00 (08:00 GMT) - Eurozone. Markit Composite Manufacturing Purchasing Managers Index (PMI);
11:30 (08:30 GMT) – United Kingdom. Markit Services Purchasing Managers Index (PMI).

Author: Anthony Porter, IAFT Analyst