Stalemate Drags On Over Economic Stimulus Bill
The US index closed indecisively yesterday. However, it still remained above the 93 handle.
There were hopes of further progression witnessed from the beginning of the month on the index. Instead, a U-turn occurred over the lack of progress on the next coronavirus stimulus bill. The Senate voted 52-47 to advance the bill, short of the 60 votes needed to continue debate on the measure.
In addition, jobless claims were marginally down from the previous week. This is despite economists’ concerns that unemployment remains at elevated levels.
We now look towards today’s inflation rate news for any indication for a push towards 94.
ECB Optimism Triggers Euro Rally
The euro remained above 1.18 as it closed 0.11% higher on Thursday.
The EURUSD pair did reach the lofty heights of 1.19 during intraday trading, however, the spark soon fizzled out as the ECB press conference came to an end.
Ms. Lagarde played down the recent strength in the euro which has been 10% up on the dollar since March. Worries over inflation in the eurozone were reduced as it was highlighted that the exchange rate was ‘not a policy target’.
The conference also confirmed it has raised its forecast for inflation next year as well as its growth forecast for this year.
Should the 1.20 region be reached again, will the ECB’s sentiment shift?
Time and Trust are Running Out Over Brexit Divorce Bill
The pound fell further across the board yesterday, as the GBPUSD closed 1.44% down towards 1.28.
Post-Brexit trade deal talks are set to resume today after the UK and EU failed to agree on terms.
The EU has threatened the UK government with legal action if it does not ditch its controversial Internal Market Bill by the end of the month.
The bill addresses the Northern Ireland Protocol. This is an element of the Brexit withdrawal agreement designed to prevent a hard border returning to Ireland.
How much will the pound be worth should a no-deal materialize?
Equity Bounce Back Falters
The main indices were hit by more sell-offs as the lack of progress over a $300 billion fiscal stimulus affected sentiment.
Tech shares were the biggest losers as Apple, Facebook, Amazon, and Microsoft all fell almost 3%.
Uncertainty remained on the commencement of the testing of COVID vaccination trials. President Trump stated his hope of an antidote by the year’s end.
Is this statement a reality or just an attempted boost for his election campaign?
Gold Holds Firm Over US-Sino Tensions
Gold finished flat yesterday closing at the same price it opened at. The yellow metal hovered around $1945 as it looks for a push towards the psychological $1950 region.
The US revoked the visas of more than 1,000 Chinese students and researchers who are deemed to be a security risk. China has now accused the US of racial discrimination which could shift risk appetite once again.
As relations worsen, could we see another attempt towards $2,000?
Crude Inventory Data Shows Surprise Build
WTI closed 1.7% lower on Thursday as the EIA reported that inventories rose by 2 million barrels from last week.
The failure of closing above $37 indicates that the sell-off is not yet over as the talk of over-supply continues.
Oil refineries on the US Gulf Coast will be on the lookout for more possible closures as the hurricane season peaks.