European Session Wrap Up 13th July 2020

Essential Insights

  • Asian stocks in the green
  • Oil price dips lower following OPEC+ News
  • Markets await key data releases this week

Market Overview

Asian stocks started the week higher as the US earnings season is about to start and expectations of improving Chinese data. Consensus is for China’s economy to return to year-on-year growth in the second quarter, expectations of 2.2% growth y/y. GDP fell 6.8% y/y in the first quarter of the year, the first decline in more than four decades.

Oil traded lower as news that OPEC+ might be leaning towards easing oil output controls in August. The monitoring committee will meet mid-week to discuss if they should begin unwinding these stimulus measures to 7.7 million as planned or keep curbs at 9.6 million barrels a day.

In FX, the dollar weakened as stocks gained – The Dollar Spot Index traded 0.2% lower overnight. AUD was the best performer overnight amid improved risk sentiment, AUD/USD gained 0.40% overnight and touched a high of 0.6984.

GBP/USD ended the week higher and the pair traded 0.10% higher on Friday, touching a daily high of 1.2664. Research expects the near-term positive equity momentum to keep GBP supported – Last week’s fiscal top-up and this week’s punchy rebound in data should also help retain sterling’s gains.

Optimism regarding the EUR 750bn EU recovery fund has fuelled a catch-up of European equities to the US and supported EUR/USD, consistent with expectations. Risks seem skewed to the upside for the EUR should the conclusion of a deal take place during this week’s EU summit.

In-house Analyst
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