Global rally pauses again - 16.7.2020

The Dollar weakening has paused currently ahead of US Labor Department report expected to show 1.25 million Americans likely sought unemployment benefits over the last week. The live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, lost 0.2% Wednesday despite a Federal Reserve report industrial production jumped by 5.4% over month in June after 1.4% gain in May. Both EUR/USD and GBP/USD continued climbing yesterday with both pairs lower currently. The European Central Bank is expected to hold interest rates and its quantitative easing program unchanged today ahead of a European Union leaders meeting to discuss the proposed 750 billion euro recovery fund. USD/JPY continued sliding while AUD/USD continued climbing yesterday with the dynamics reversed for both pairs currently.

Futures on three main US stock indexes are down currently after a bullish session on Wednesday. Earnings season continues with Bank of America, Morgan Stanley and Netflix reporting quarterly results today. Stock indexes in US ended higher yesterday after better than expected corporate earnings reports so far for the second quarter: the three main US stock indexes recorded gains ranging from 0.6% to 0.9%. European stock indexes are retreating currently after a rally Wednesday led by travel shares. Asian indexes are down today led by Shanghai Composite after reports US is considering a sweeping travel ban on Chinese Communist Party officials, following travel restrictions by China on US lawmakers recently imposed. Markets ignored the positive report China’s economy grew 3.2% in annual terms in Q2, after a 6.8% contraction in the previous quarter.

Brent is edging lower today. Prices advanced Wednesday supported by the US Energy Information Administration report that US crude oil inventories fell 7.5 million barrels last week. The decision by the Organization of the Petroleum Exporting Countries and allied producers, collectively known as OPEC+, to start easing record production cuts of 9.7 million barrels per day to 7.7 million barrels per day starting in August through the end of the year didn’t have much impact on prices. The US oil benchmark West Texas Intermediate (WTI) futures gained: August WTI added 2.3% but is down currently. September Brent crude closed 2.2% higher at $43.79 a barrel on Wednesday.