Here is what you need to know on Wednesday, July 15:
The market mood is upbeat after Moderna reported progress in developing a vaccine for coronavirus. Concerns about the spread of the disease in America, the Bank of Canada’s decision, and tensions around Hong Kong are eyed.
Moderna times: A vaccine candidate by Moderna has seen promising results, with high levels of antibodies and no significant secondary effects in patients. The publication of progress in the New England Journal of Medicine boosted stocks worldwide and weighed on the safe-haven US dollar.
US President Donald Trump has ordered an end Hong Kong’s special status in retaliation to China’s new security law against the territory. Beijing vowed to hit back with sanctions of its own. The UK will phase out the usage of Huawei technology.
Coronavirus cases have surpassed 3.4 million in the US and deaths surpassed 136,000. California, which announced a sweeping shutdown, has seen a record number of cases, and so has Texas, which has only taken small measures. Figures from these states and Florida are eyed.
The Bank of Japan left its policy unchanged, as expected. Governor Haruhiko Kuroda and his colleagues reiterated their commitment to act without hesitation. The bank continues aiming for having 10-year bond yields at around 0%. The Tokyo coronavirus panel raised the infection alert rate to 3, the highest level.
The Bank of Canada is set to leave the interest rate unchanged at 0.25%. Tiff Macklem, the new governor, is set to maintain his cautious tone.
See Bank of Canada Preview: Data confirms a bottom, policymakers to remain cautious
US industrial output and the Empire State Manufacturing Index are of interest after inflation figures for June beat expectations. Investors are awaiting Thursday’s all-important Retail Sales release for June.
EUR/USD is trading on high ground around 1.14 as German Chancellor Angela Merkel and Spanish Prime Minister Pedro Sánchez committed to moving forward with the EU Fund. A full summit begins on Friday. The pressure to sign off the accord is also coming from the European Central Bank.
See ECB Preview: EUR/USD depends on Lagarde’s fearless nudging of the Frugal Four
GBP/USD is trading just below 1.26 as the gradual reopening of the economy continues. Gross Domestic Product growth disappointed with only 1.8% in May, a slow bounce from the downfall in March and April. Consumer Price Index statistics for June are set to show stability.
AUD/USD is flirting with the 0.70 level ahead of the release of Australian job figures for June and China’s GDP for the second quarter. Melbourne remains under lockdown. NZD/USD is trading around 0.6550 ahead of New Zealand’s inflation figures.
Gold is trading above $1,800, consolidating previous gains. WTI Oil is hovering around $40 ahead of inventory data.
Cryptocurrencies are stable with Bitcoin trading just below $9,300, Ethereum around $250, and XRP just under $0.20.