Vaccine Hopes & Upbeat Data Lift Stocks
Fiona Cincotta July 15, 2020 7:27 AM
Vaccine optimism boosted risk appetite, lifting Asian markets overnight putting European bourses on track for a stronger start. Upbeat UK inflation data has added to the risk on tone
Vaccine optimism boosted risk appetite, lifting Asian markets overnight putting European bourses on track for a stronger start. Stronger than forecast UK inflation data has added to the risk on tone. Meanwhile, elevated US – Chinese tensions are broadly being shrugged off.
UK inflation surged +0.6% mom in June unexpectedly picking up from May and surpassing expectation s of 0.4%. On an annual basis, inflation increased 1.4%, ahead of the 1.2% forecast. As lockdown measures were eased and the UK economy gradually reopened, demand has picked up boosting inflation. This is some well needed good news after yesterday’s GDP misery and has returned some faith that he UK economy is on the road to recovery, albeit a long road.
As risk appetite rises stocks are pushing higher and the safe haven dollar has fallen out of favour. News that President Trump has ordered an end to Hong Kong’s special status in relation against China’s national security law in Hong Kong has broadly gone unnoticed. This follows reports that the UK will phase out the use of Huawei technology.
Coronavirus numbers are also being overshadowed by vaccine optimism. The tally in the US reached 3.4 million, with 136,000 deaths recorded. California has re-imposed lockdown measures across the hardest hit counties in the state amid record covid numbers.
EUR solid on stimulus hopes
On the currency markets, the Euro is a star performer rising to 4 month highs on hopes that the economic recovery stimulus plan will be agreed after Germany’s Angela Merkel and Spain’s PM Pedro Sanchez committed to moving forward with the EU Fund.