Essential Insights

  • Asian equity markets were mixed as covid-19 cases in the US spiked
  • Miami Mayor suggested a stay at home order could be initiated if the situation worsens
  • US President Trump announced a legislation to hold China accountable for actions in Hong Kong surrounding the new security law
  • Disagreements have arose in the White House over the use of stimulus checks versus payroll tax cuts as part of the next
    stimulus bill
  • German Chancellor Angela Merkel has casted doubt on the EUR 750 billion recovery fund

Noticeable FX Movements

The DXY was fairly quite overnight following sharp selling yesterday which saw the index falling below the 96.00 level. This came as various FED members came forth with bearish comments around the US economic outlook.

Mounting cases in the US have also kept a ceiling on upside for the DXY, with cases in Florida and Texas exponentially growing supplemented by Miami Mayor suggesting a stay at home initiative could be enforced if the situation does not improve. 

Market Tone

Markets have remained rather cautious but with slight risk appetite. Stoxx Europe 600 Index erased European morning gains as German Chancellor Angela Merkel casted doubts on the approval of the EUR 750 billion recovery fund, it is has been well known European leaders have struggled to unilaterally agree on any stimulus packages.

A reminder that the EU recovery fund summit kicks off today in Brussel, it is likely markets remain cautious with no real conviction until we have any developments from the meeting.

Emerging market shares have headed for their biggest weekly loss in 3 months due to lingering US vs China tensions.

Covid-19 Latest Data

  • US Covid-19 cases rose 67,404 (Previously +60,971) and the death toll +947 (Previously +773)
  • AFP later tweeted that US cases rose by a record 68,428 in 24 hours
  • US cases rose by at least 70,727 on Thursday which is a record single-day increase and deaths rose by 969 to 138,284 which was the largest increase since June 10th
  • California Covid-19 cases rose by 8,544 (Previously +11,126) and death toll rose by 118 (Previously +140)
  • Texas coronavirus cases increased by 10,291 to a total of 292,656 which was the 4th largest increase on record and deaths rose by 129 to 3,561 which was the largest single-day increase, according to the State Health Department. 
  • New York cases rose by 769 (Previously +831) and the death toll rose by 14 (Previously +9)

Asian Markets

The ASX 200 was down 0.1% as Australian state Victoria has suffered a record increase in covid-19 cases with 428 cases being reported (previously 317). Performance in large cap tech companies which have a noticeable composition in the Index also posted poor performance, pulling the index lower.