Stocks Drop As Virus Spreads, Brexit Talks Begin
Fiona Cincotta June 29, 2020 7:24 AM
Markets have kicked off the week in a depressed mood amid gloomy coronavirus developments. Brexit trade talks begin.
Markets have kicked off the week in a depressed mood amid gloomy coronavirus developments, overshadowing vaccine developments and encouraging data from China. As the number of cases worldwide reaches 10 million and the death toll strikes 500,000, concerns over rising coronavirus cases and second wave fears continue to drive risk sentiment. California’s governor has ordered the immediate closure of all bars in 7 counties, with 8 other counties advised to implement similar closures.
This is an important week for data, with PMI’s, UK GDP and US payrolls as well as Federal Reserve Chair Jerome Powell speaking tomorrow. Whilst data is expected to show that the worst is behind us, a double dip recession could well be on the cards if lockdowns are widely re-imposed.
Whilst the US Dollar has often advanced when risk sentiment stutters and stocks fall, that hasn’t been the case this morning, the USD is trading off versus its major peers.
Pound Advances, Brexit Trade Talks Begin
USD weakness, in addition to Boris Johnson’s spending plans are helping the Pound pick up off monthly lows as the next round of post Brexit trade talks begin today. Pound traders will be watching the headlines carefully, any leaks of lack of progress could drag on demand for Sterling. Heading into the talks the EU is looking for compromise, whilst the UK is appearing less flexible as key issues such as fishing, EU judicial power and “the level playing field” remain contentious. Any hint of these being overcome could boost the Pound. Traders could also seek solace in silence ahead of update from EU chief negotiator Michel Barnier at the end of the week.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.