30th June 2020 - A busy day ahead with markets focusing on a economic releases for direction


Good Morning,


Market Headlines

A rise in US equity markets overnight after home sales data printed a record bounce in sales. The S&P 500 and the NASDAQ were up 1.3%, while the Dow Jones rallied 2.3% as positive sentiment from economic data outweighed the negativity surrounding the rise coronavirus cases in parts of the US. Brent futures were up 1.3% to $41.55, copper gained 0.7%, iron ore dropped 3.8% to $99.45, and gold gained 0.1%.


Currencies

The US dollar index closed marginally up 0.1% for the day.

EUR traded between 1.1220 & 1.1288.

USD/JPY ranged between 107.20 & 107.88.

AUD ranged between 0.6891 & 0.6842.

NZD ranges were 0.6443 to 0.6404.

AUD/NZD range was 1.0670 to 1.0700.


AUD Thoughts

A busy day ahead starting locally with ABS payrolls data for the fortnight to 13 June released which measures the number of employees in paid work and with market expectations of a slight over May.


Eurozone June CPI is due later this evening where the focus will be on core and services CPI to see how underlying prices are developing. With the ECB’s Rehn warning of “deflation risk”, an increase in CPI induced by volatile energy prices will certainly not alleviate deflationary fears at the ECB or rule out further policy action.


AUD/USD remained steady overnight with buying pressure emerging late in the session. Despite the late demand, offering interest still looks set to dominate with supply emerging as we approach 0.6900 while demand likely rests in the 0.6800-10 region.


Event Risk Data Today

Australia: Weekly Payroll Jobs and Wage data is out as well as the RBA’s Debelle will speak at 12:30pm on “The RBA’s policy actions and balance sheet”.


New Zealand: June Business Confidence Survey should confirm an improvement, though the index remains at depressed levels (prior: -33)


Japan: May Unemployment


China: Market expects the June Manufacturing PMI (market f/c: 50.5) and Non-Manufacturing PMI (market f/c: 53.6) to remain steady.


Euro zone: June CPI Inflation is expected to remain relatively unchanged (market f/c: 0.2%)


UK: Q1 GDP will likely remain unchanged at -2.0% although markets are expecting lot more economic pain to come for the UK.


US: June Chicago PMI and June Consumer Confidence will be released today. Fed Chair Powell and Treasury Secretary Mnuchin will testify before the House Financial Services Committee (02:30 AEST) and FOMC member Williams will speak on Central Banking in the Age of Covid (01:00 AEST).



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