Here is what you need to know on Thursday, June 18:
The market mood is somewhat pessimistic as concerns about coronavirus marginally outweigh optimism about the economic recovery. The BOE, US jobless claims, and coronavirus news are all in the mix.
US Coronavirus: Hospitalizations in Texas and cases in Florida continue rising at an alarming rate. President Donald Trump said he will not shut down the economy while Vice President Mike Pence said the US is not suffering from a second wave. Top medical expert Anthony Fauci commented that America is still in the first wave.
Jerome Powell, Chairman of the Federal Reserve, called on Congress to add support to the economy at the critical point of recovery. In his second day testifying on Capitol Hill he was encouraged by the bounce in retail sales, which revived hopes for a quick bounce.
US Housing Starts poured some cold water on the enthusiasm by remaining under one million annualized. Weekly jobless claims are due out on Thursday and are set to continue the slow improvement.
Jobless Claims Preview: Better is still a long way to go
Trump is fighting to stop the publication of an explosive book by his former National Security Adviser John Bolton. The security hawk claims that the president asked his Chinese counterpart Xi Jinping for help in the elections, and also supported China’s building of education camp for Uyghurs, a Muslim minority in the west of the country. Trump is about to sign a bi-partisan law condemning China for the move. Beijing vowed to retaliate.
China continues battling the COVID-19 outbreak in Beijing, with drastic measures to limit transport. The South China Morning Post says a study in Wuhan suggests many humans may never develop immunity against COVID-19
The Chinese central bank cut its reverse repo rate from 2.55% to 2.35% in an attempt to boost the economy. Both China and India have made efforts to defuse tensions following a border clash that cost the lives of tens of soldiers.
AUD/USD is on the back foot, trading below 0.69 after Australia reported a loss of 227,700 jobs, worse than expected. The unemployment rate leaped to 7.1%.
NZD/USD is also struggling, trading around 0.6450 after Gross Domestic Product disappointed with a fall of 1.6% in the first quarter.
GBP/USD is awaiting the Bank of England’s rate decision. The “Old Lady” is set to boost its bond-buying scheme by around £100 billion while leaving its rates unchanged. Hints about taking borrowing costs below zero are eyed. The meeting minutes will also be watched.
See Bank of England Preview: Bailey may boost pound by going big on bond-buying, beware negative rates
UK Prime Minister Boris Johnson will meet French President Emmanuel Macron amid efforts to revive Brexit talks. While the European Commission is reportedly readying compromises on fisheries, Britain is preparing a “Shock and Awe” plan for a no-deal. Germany is also urging members to prepare for such an outcome.US Trade Representative Robert Lighthizer cast doubt that a US-UK trade deal can be achieved by year-end.
EUR/USD has stabilized around 1.1250. The European Central Bank’s monthly bulletin is due out.
The Swiss National Bank is projected to leave its Libor Rate unchanged at -0.75%, pledging to intervene to weaken the franc is necessary. The SNB has not modified its policy since dropping the infamous “SNBomb” in 2015.
Oil is somewhat pressured with WTI around $37. The OPEC JMMC is scheduled for later in the day. USD/CAD is around 1.35, ahead of ADP’s Canadian jobs report.
Gold prices stick to the range, trading just under $1,730. The precious metal dipped on Wednesday.
Cryptocurrencies have been edging lower, with Bitcoin hovering around $9,400.
More Why EUR/USD may rally, where to find the key to gold move, lots more – Interview with Richard Perry
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