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Key events for next week: UK and Canada GDP, China, Eurozone and the US PMI's, FOMC minutes, eurozone and US unemployment rate, US and Canada trade balance

On Monday, at 08:30 GMT, UK will announce changes in the volume of the M4 money supply aggregate, the number of approved mortgage applications and the volume of net loans to individuals for May. At 09:30 GMT, Bank of England Governor Andrew Bailey will deliver a speech. At 10: 00 GMT, the Euro zone will present the consumer confidence index, the index of economic sentiment, the index of business optimism in industry and the index of business sentiment for June. At 12:00 GMT, Germany will release the consumer price index for June. At 12:30 GMT, Canada will publish the producer price index for May. At 14:00 GMT, the US will report a change in the pending home sales for May. At 23:30 GMT, Japan will report a change in the unemployment rate for May, and at 23:50 GMT, it will report a change in industrial production for May.

On Tuesday, at 01:00 GMT, China will release the manufacturing PMI and the services PMI for June. At 01:30 GMT, Australia will report changes in private sector lending for May. At 05:00 GMT, Japan will announce a change in the housing starts for May. At 06:00 GMT, Britain will announce changes in GDP, balance of payments and total investment for the 1st quarter. Also at 06: 00 GMT, Britain will present the Nationwide house price index for June. At 06:30 GMT Switzerland will report change in retail trade for May. At 06:45 GMT, France will announce changes in consumer spending for May and release the consumer price index for June. At 07:00 GMT, Switzerland will present the KOF index of leading economic indicators for June. At 09:00 GMT, the Euro zone will release the consumer price index for June. At 12:30 GMT, Canada will report changes in GDP for April. At 13: 00 GMT, the US will publish the S&P/Case-Shiller home price index for April. At 13:45 GMT, the US will release the Chicago purchasing managers ' index and consumer confidence indicator for June. At 16:30 GMT, Fed Chairman Jerome Powell will deliver a speech. At 22:30 GMT Australia will present the index of activity in the manufacturing sector from AiG in June. At 23:50 GMT, Japan will publish the Tankan index of activity in the large producer sector and the Tankan index of activity in the non-manufacturing sector for the 2nd quarter.

On Wednesday. At 01:30 GMT, Japan will release the manufacturing PMI for June. At 01:45 GMT China will release manufacturing PMI from Caixin in June. At 05:00 GMT, Japan will release a consumer confidence indicator for June. At 06:00 GMT Germany will report the change of volume of retail trade for May. Then the focus will be on the manufacturing PMI for June: Switzerland will report at 07:30 GMT, France at 07:50 GMT, and Germany at 07:55 GMT. Also at 07:55 GMT, Germany will announce changes in the unemployment rate and the number of unemployed for June. At 08:00 GMT, the Euro zone will publish the index of business activity in the manufacturing sector for June. At 08:30 GMT, Britain will release the index of business activity in the manufacturing sector for June. At 12:15 GMT, the US will announce the change in the number of employees from ADP for June. At 13:45 GMT, the US will present the index of business activity in the manufacturing sector for June, and at 14: 00 GMT - the ISM manufacturing index for June. Also at 14:00 GMT, the US will report changes in construction spending sector for May. At 14:30 GMT, the US will announce changes in oil reserves according to the Ministry of energy. At 18:00 GMT in the US, the FOMC minutes will be published.

On Thursday, at 06:30 GMT, Switzerland will release the consumer price index for June. At 09:00 GMT, the Euro zone will publish the producer price index for May and report changes in the unemployment rate for May. At 12:30 GMT, the US will report changes in the unemployment rate and the number of people employed in the non-agricultural sector for June and the number of initial applications for unemployment benefits. Also at 12:30 GMT, the US and Canada will report changes in the foreign trade balance for May. At 14:00 GMT, the US will announce changes in factory orders for May. At 22:30 GMT, Australia will release the AIG construction activity index for June. At 17:00 GMT in the US, the Baker Hughes report on the number of active oil drilling rigs will be released.

On Friday, at 01:30 GMT, Australia will announce changes in retail sales, trade balance and the number of construction permits for May. At 01:45 GMT China will introduce services PMI from Caixin for June. Then the focus will be on services PMI from Markit for June: France will report at 07: 50 GMT, Germany at 07: 55 GMT, the Eurozone at 08:00 GMT, and Britain at 08:30 GMT.

DJIA -2.75% 25,038.08 -707.52 Nasdaq -2.24% 9,793.10 -223.90 S&P -2.24% 3,014.66 -69.10
U.S.: Baker Hughes Oil Rig Count, June 188
European stocks closed: FTSE 100 6,159.30 +12.16 +0.20% DAX 12,089.39 -88.48 -0.73% CAC 40 4,909.64 -8.94 -0.18%
China tells U.S. that "meddling" in Hong Kong and Taiwan could jeopardize farm product purchases in phase one trade agreement - WSJ
U.S.: Spending picks up as income falls in May - TD Bank Financial Group

According to ActionForex, analysts at TD Bank Financial Group note that personal income fell in May, declining by 4.2% month-on-month, as the effects of one-time checks provided by the CARES Act largely wore off last month. 

"Despite the decline in income, spending picked up in May, rising by 8.2% month-on-month, slightly below consensus expectations for 9.0%. Goods expenditure drove the pick-up, rebounding by 14.1% on the month. Spending on durable goods was especially strong, specifically that on motor vehicles and parts as well as recreational good and vehicles. Services spending also rose, increasing by 5.4% in May. The largest contributors in this category were health care, food services and accommodation. Even with the increase in May, spending still remains 11% lower than the February level."

"Spending staged a comeback in May as states reopened their economies, unleashing pent-up consumer demand. After being deprived of non-essential goods and services in April, consumers rushed to spend on these areas last month."

"The return of spending would not have been possible without the income support programs provided by the CARES Act. Yes, income fell in May, but that was only after an extraordinary increase in April. Moreover, more than twenty million people are receiving an additional $600 per week as part of the expanded unemployment insurance program. As a result, most households that have experienced job losses are receiving more cash from CARES Act than they would be if they were still working. This injection of income played an important role in the spending rebound last month."

"The spending outlook appears more precarious in the coming months. The expanded unemployment benefits are set to expire at the end of July, which could lead to an even greater decline in household income. If this happens, consumers will most likely reduce spending and prolong the economic downturn."

Texas Governor Greg Abbott orders to close all bars and similar establishments that receive more than 51% of their gross receipts from sale of alcoholic beverages

  • Orders to reduce capacity limits for dine-in restaurants to 50% from 75%
  • Rafting and tubing businesses must close
  • Gatherings of 100 or more people must be approved by state

U.S. consumer sentiment worse than initially estimated in June

The final reading for the June Reuters/Michigan index of consumer sentiment came in at 78.1 compared to a preliminary reading of 78.9 and the May final reading of 72.3.

Economists had forecast the index to be revised up to 79.0.

According to the report, the index of the current economic conditions rose 5.8 percent m-o-m to 87.1 from May’s final reading of 82.3.

Meanwhile, the index of consumer expectations surged 9.7 percent m-o-m to 72.3 from May’s final reading of 65.9.

Richard Curtin, the Surveys of Consumers chief economist, noted that consumer sentiment slipped in the last half of June, although it still recorded its second monthly gain over the April low. “While most consumers believe that economic conditions could hardly worsen from the recent shutdown of the national economy, prospective growth in the economy is more closely tied to progress against the coronavirus. The early reopening of the economy has undoubtedly restored jobs and incomes, but it has come at the probable cost of an uptick in the spread of the virus,” he added.

U.S.: Reuters/Michigan Consumer Sentiment Index, June 78.1 (forecast 79)
Gold: Declining real rates to lift the yellow metal above $1800 - TDS

FXStreet notes that gold’s attempt to surpass the $1800 mark was disrupted by renewed coronavirus concerns. Nevertheless, strategists at TD Securities expect the yellow metal to trade above $1800 due to long-term inflation expectations.

“Covid fears have interrupted, but not canceled gold's imminent breakout. Indeed, the yellow metal's third attempt to break-out into the $1800s was interrupted by renewed virus concerns, which have paused the rise in long-term inflation expectations that we have seen over the past few trading sessions. Nonetheless, we expect that growing confidence in the economic recovery, amid extremely low rates volatility, will help long-term inflation expectations continue to rise. In this context, declining real rates will support gold prices into the $1800s.” 

“The world-war era fiscal and central bank stimulus, the change in the central bank template that will incorporate 'symmetric inflation targets' and unwinding globalization, also suggest that inflation-hedge assets may grow in popularity. In this context, fading the reversal of safe-haven flows will continue to be a profitable trade.”

U.S. Stocks open: Dow -0.84%, Nasdaq -0.44%, S&P -0.55%
Before the bell: S&P futures -0.19%, NASDAQ futures -0.01%

U.S. stock-index futures fell slightly on Friday, as investors assessed the implications of Federal Reserve bank stress test results and re-acceleration in new coronavirus cases in the U.S.

Global Stocks:



Today's Change, points

Today's Change, %





Hang Seng
























Crude oil






S&P 500: Key support seen at 2835 below the 200-DMA at 3024 - Credit Suisse

FXStreet reports that analysts at Credit Suisse note that S&P 500 moved back higher late in the session on Thursday, however focus remains on the crucial 200-day average at 3024/21 as a break below here would suggest the correction can extend further.

“S&P 500 reversed back higher on Thursday late in the session, moving back into its prior tight range after holding above the key 200-day average at 3024/21. However, the recent ‘island top’ and turn lower in daily MACD momentum keeps us biased towards further consolidation and likely a deeper correction lower.” 

“The 200-day average at 3024/21 remains crucial, as a close below here would confirm that a more concerted correction lower can indeed emerge, with the next support then seen at the 2966 low, before the 38.2% retracement of the entire rally from March at 2835. We will be watching closely if MACD turns outright negative and whether volume picks up should the market continue lower to determine whether or not we are dealing with a more concerted setback.” 

“Near-term resistance now moves to the 13-day exponential average at 3094, above which would neutralize the recent downside pressure and expose the next short term resistances at 3115, then the prior range top at 3153/56.”

Wall Street. Stocks before the bell

(company / ticker / price / change ($/%) / volume)

3M Co















Amazon.com Inc., NASDAQ





American Express Co










Apple Inc.





AT&T Inc





Boeing Co





Caterpillar Inc





Chevron Corp





Cisco Systems Inc





Citigroup Inc., NYSE





E. I. du Pont de Nemours and Co





Exxon Mobil Corp





Facebook, Inc.





FedEx Corporation, NYSE





Ford Motor Co.





General Electric Co





General Motors Company, NYSE





Goldman Sachs





Google Inc.





Home Depot Inc










Intel Corp





International Business Machines Co...





Johnson & Johnson





JPMorgan Chase and Co





McDonald's Corp





Merck & Co Inc





Microsoft Corp










Starbucks Corporation, NASDAQ





Tesla Motors, Inc., NASDAQ





The Coca-Cola Co





Twitter, Inc., NYSE





Verizon Communications Inc










Wal-Mart Stores Inc





Walt Disney Co





Yandex N.V., NASDAQ





Target price changes before the market open

Amazon (AMZN) target raised to $3333 from $2750 at Deutsche Bank

Tesla (TSLA) target raised to $900 from $850 at Deutsche Bank; maintain Hold

Downgrades before the market open

Boeing (BA) downgraded to Mkt Perform from Outperform at Bernstein; target $165

U.S. consumer spending surges 8.2 percent in May, income drops 4.2 percent

The Commerce Department reported on Friday that consumer spending in the U.S. surged 8.2 percent m-o-m in May after a revised 12.6 percent m-o-m plunge in April (originally a 13.6 percent m-o-m tumble). That was the largest monthly gain in personal spending on record. Economists had forecast the reading to show a 9.0 percent m-o-m climb.

Meanwhile, consumer income fell 4.2 percent m-o-m in May, following a revised 10.8 percent m-o-m jump in the previous month (originally a 10.5 percent m-o-m advance). That was the largest monthly decrease in personal income since January 2013. Economists had forecast a 6.0 percent m-o-m decline.

The May surge in personal income primarily reflected an increase in government social benefits to persons as payments were made to individuals from federal economic recovery programs in response to the COVID-19 pandemic.

The personal consumption expenditures (PCE) price index, excluding the volatile categories of food and energy, which is the Fed's preferred inflation measure, edged up 0.1 percent m-o-m in May, following an unrevised 0.4 percent m-o-m decrease in the prior month. Economists had projected the index would be unchanged m-o-m.

In the 12 months through May, the core PCE increased 1.0 percent, the same pace as in the 12 months through April. Economists had forecast an advance of 0.9 percent y-o-y.

U.S.: Personal Income, m/m, May -4.2% (forecast -6%)
U.S.: Personal spending , May 8.2% (forecast 9%)
U.S.: PCE price index ex food, energy, m/m, May 0.1% (forecast 0%)
U.S.: PCE price index ex food, energy, Y/Y, May 1% (forecast 0.9%)
European session review: USD mixed as U.S. infections surge and stimulus bets increase
TimeCountryEventPeriodPrevious valueForecastActual
06:45FranceConsumer confidence June939597
08:00EurozonePrivate Loans, Y/YMay3%3.2%3%
08:00EurozoneM3 money supply, adjusted y/yMay8.3%8.6%8.9%

USD traded mixed against its major counterparts in the European session on Friday after the United States reported a record-high single-day spike in new coronavirus infections on Thursday, fueling worries that a resurgence of the virus could shutter portions of the economy.

USD rose against GBP, AUD and CAD, fell against JPY and NZD, and changed little against EUR and CHF.

The U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, edged up 0.03% to 97.46.

New coronavirus cases in the U.S. jumped by nearly 40,000 yesterday, led by a surge in infections in some southern and western states. On this background, Texas' Governor Greg Abbott suspended his state's re-opening plans, while California Governor Gavin Newsom declared a budget emergency.

According to the Johns Hopkins Center for Systems Science and Engineering, the total number of confirmed global cases of the COVID-19 rose to 9,632,969, with the U.S. recording 2,422,312 coronavirus cases, the most in the world.  

Additional pressure on USD was put by investors' bets that the Fed will provide more financial stimulus if the U.S. economy experiences a second wave of shutdowns.

On Thursday, the Fed released its stress test results and sensitivity analysis for the banks, which revealed that some banks could get close to minimum capital levels in scenarios related to the coronavirus pandemic. Because of this, the Fed is to require banks to suspend share repurchases and keep dividend payments at current levels for the third quarter.. 

USD: Upside appears limited despite spike in cases - ING

Francesco Pesole, FX Strategist at ING, notes that markets appear to be stabilising today as concerns about another record increase in US Covid-19 cases is being mitigated by hopes of new rounds of stimulus.

"Texas and Florida continue to attract most of the attention as the two states are halting their re-opening plans. It remains to be seen whether any state will ultimately move to re-establish full-lockdown orders: the developments over the weekend will tell us more and will be the key in determining the direction of global sentiment next week."

"While waiting for such clarity, markets are likely factoring in the notion that cases are on the rise again and may show somewhat lower sensitivity to the contagion numbers today. Yesterday’s release of the Fed’s stress test results was mixed: while US banks performed quite well, the Fed is imposing caps on dividends and share buybacks in 3Q on the back of lingering uncertainty around the pandemic impact. The impact on sentiment has been limited and stock index futures show a relatively upbeat mood today."

"Accordingly, the dollar’s upside potential may remain somewhat limited today amid some generalised stabilisation in G10 FX – also due to the lack of market-moving data - although some month-end and quarter-end flows may generate some volatility throughout the day."

USD/CHF: Resistance at 0.9502 caps the correction higher - Credit Suisse

FXStreet notes that USD/CHF has moved into a short-term range, which analysts at Credit Suisse eventually expect to be resolved lower, as the pair is capped by the key resistance at 0.9502. Support is seen at 0.9425/20, then 0.9376.

“USD/CHF stayed capped once more at the key 13-day exponential average, currently at 0.9502 and we ideally look for a move lower from here. With this in mind, we see support initially at 0.9475, then 0.9441/33, ahead of .9425/20, where we might see an attempt to hold at first. Removal of here would then expose the current June low at 0.9376, beneath which would see the recently completed ‘hammer’ candlestick negated and we would then expect to see another leg lower.”

“Resistance moves to 0.9502/08, ahead of 0.9547/53, which ideally holds to keep the immediate downside bias intact. A close above here would see a minor base established to suggest further corrective upside, which ideally would be capped by 0.9632/51.”

RBA is seen on hold at its next meeting - UOB

FXStreet reports that strategists at UOB Group’s Quarterly Global Outlook noted the RBA will likely leave the OCR unchanged at 0.25% at the July 7 event.

“We do not see further reductions in the OCR. However, it is likely the RBA will keep it on hold for an extended period.”

“The focus will thus remain firmly on end-user rates via the yield curve target, as well as ensuring sufficient liquidity in bond markets and the free flow of credit to households and business.”

EUR/USD trades in a potential bull flag with resistance seen at 1.1232 - Credit Suisse

FXStreet notes that EUR/USD remains under pressure, navigating the area just above 1.1200. Nevertheless, analysts at Credit Suisse believe the market is now forming into a potential bull ‘flag’ pattern with a break of the 1.1232 resistance to reinforce the bullish view.

“We believe the market may be trading in a potential bullish ‘flag’ pattern, which are short sharp countermoves which clear out prior positioning, eventually allowing the uptrend to reassert itself. Our core bias therefore stays higher, with short-term resistance first seen at 1.1232, above which would turn the short term risks back higher. Thereafter, an eventual move above 1.1339/69 would trigger the pattern, with next resistances at 1.1423, before the important 1.1495 high.”

“Key support now moves to 1.1190, then 1.1169/54. A break below here would still be very much consistent with a potential ‘flag’ and would actually reinforce its potential potency by further cleansing long positioning, with only a move below 1.1133/22 negating this potential pattern.”

Company News: NIKE (NKE) posts surprise quarterly loss

NIKE (NKE) reported Q4 FY 2020 loss of $0.51 per share (versus earnings of $0.62 per share in Q4 FY 2019), worse than analysts’ consensus estimate of $0.04 per share.

The company’s quarterly revenues amounted to $6.313 bln (-38.0% y/y), missing analysts’ consensus estimate of $7.261 bln.

NKE fell to $98.28 (-3.08%) in pre-market trading.

UK's finance minister Sunak: We are past the acute phase of the crisis
  • Furlough scheme not sustainable indefinitely
  • Furlough scheme will last for up to eight months
  • We cannot protect every job despite unprecedented action
  • The best way to protect jobs is to have businesses reopen
  • The most important thing now is to safely reopen the economy
  • Remain committed to investments in infrastructure
Spain retail sales fall in May

According to the report from RTTNews, Spain retail sales declined sharply in May but the pace of fall softened, data from the statistical office INE showed Friday.

Retail sales declined by an adjusted 19.0 percent yearly in May, following a 31.6 percent fall in April.

On an adjusted basis, retail sales decreased 20.2 percent in May, following a 31.5 percent fall in the preceding month.

On a month-on-month basis, retail sales rose 19.3 percent in May, reversing a 20.1 percent decline in the previous month. Sales rose for the first time in three months.

Non-food sales advanced 51.3 percent on month in May. Sales of household equipment grew 89.5 percent.

AUD/USD: Headwinds now, tailwinds later – CIBC

FXStreet reports that AUD/USD has outperformed as the pair rebounded sharply off lows in mid-March, reaching above 0.70 earlier this month, but some consolidation has developed and Patrick Bennett from CIBC Capital Markets expects the aussie to trade around 0.6670 near-term.

“We expect consolidation to continue over the near-term with prospects for AUD/USD retesting the important break-out point of 0.6670.”

“With borders still closed or under heavy restrictions, and with the timing of re-opening uncertain, Australia risks losing very strong support via inbound tourism and via education of foreign students. China’s warning to students over studying in Australia referencing ‘discriminatory incidents’ was also concerning. Iron ore remains Australia’s top export, but by a number of estimates is also shaded by tourism, education and financial services. We don’t doubt that these sectors will recover, but a risk premium is warranted to reflect uncertainty for now.” 

“The tailwinds for the currency will come later as the recovery is confirmed and a clearer picture on China engagement is made. In addition, both fiscal and monetary stimulus will in time be a medium-term lift for local assets and the currency.” 

“The RBA’s stance on the aussie is noteworthy as the central bank has omitted any mention of it in recent statements. To us, that suggests comfort with present levels, confirmed by Governor Lowe who has said ‘I would like a lower currency at some point...but at the moment, I think it is really hard to argue the Australian dollar is overvalued.’ That aligns with our view of some consolidation in the short-term.”

EUR/USD: Galvanisation of EU politicians to fuel the common currency – CIBC

FXStreet reports that a combination of factors such as plans to joint debt issuance, German fiscal expansion, and the extension of the ECB PEPP programmes call for medium Run EUR bullishness, according to Jeremy Stretch from CIBC Capital Markets.

“Although we are not yet considering debt mutualisation, there has been progress on that end. For instance, Germany has come around to the concept of rescue funds largely made up of grants (and not loans only).Furthermore, the German government has left the ‘black zero’ budget policy behind via two significant fiscal expansions, the latter equating to a larger than expected €130bn.” 

“Although there has been pushback against the EU’s proposed €750 billion rescue plan from the ‘Frugal Four’ (Austria, Denmark, Sweden and the Netherlands), we expect this pushback to dissipate.” 

“The combination of a plan advocating joint debt issuance, German fiscal expansion, and the extension of the ECB PEPP programmes underlines our bias towards medium run EUR impetus. The risk to our EUR bullish view is if talks on the EU rescue fund breaks down.”

“Q3 20: 1.14 | Q4 20: 1.15”

Effects of U.S.-China tensions could ‘spread throughout the world,’ says expert

CNBC reports that the U.S. and China are heading into a new “cold war” that could be more damaging to the world compared to the geopolitical contest between the U.S. and Soviet Union at the end of World War II, a consultant said on Friday.

What separates the two rivalries is the extent of inter-dependency between the U.S. and China today, said Alan Dupont, chief executive of risk consultancy Cognoscenti Group. The Australian company advises clients on geopolitical, financial and national security trends.

“Unlike the first Cold War where the primary contest between the United States and Soviet Union was a geopolitical one ... both systems, both constellation of countries, didn’t have much to do from a trade and financial point of view. That is not the case today,” he told CNBC.

“That is why I think the ramifications of this conflict — this worsening rivalry between the U.S. and China — (are) going to be potentially very serious,” he added.

Relations between the U.S. and China have deteriorated to their worst in decades since President Donald Trump took office in 2017. The two countries have slapped a series of new tariffs on each other since 2018,  which escalated into a damaging trade war that spilled into other areas such as technology and finance.

More recently, U.S.-China tensions took another turn for the worse when the Trump administration blamed Beijing for not warning the world of the coronavirus pandemic earlier and hiding the extent of its outbreak. Beijing has rejected those allegations.

Washington also hit out at Beijing for eroding the freedom of Hong Kong, a semi-autonomous Chinese territory that has a special trading relationship with the U.S.

Several analysts have warned that the rivalry could deepen further as Trump is expected to tout a tough stance against China as he seeks a second term in the White House. The U.S. is scheduled to hold presidential election on Nov. 3.

“Now the contest is becoming more systemic and it’s really becoming a winner-takes-all kind of contest — so that’s the worst potential outcome,” said Dupont.

“Unless there’s some kind of a circuit breaker — there’s no prospect of that in sight in the short term — the worry is that while we cope with the effects of the pandemic, you have this worsening tensions between the U.S. and China which is going to spread throughout the world and impact on global supply chains, on business and finance everywhere.”

USD/CNH: Door open to extra consolidation – UOB

FXStreet reports that FX Strategists at UOB Group believe USD/CNH should navigate within the 7.0400/7.1000 range in the next weeks.

24-hour view: “The sudden decrease in activity in USD that resulted in a narrow trading range of 127 pips (between 7.0761 and 7.0888) came as a surprise. The price action offers no fresh clues and USD could continue to trade sideways for now, expected to be between 7.0700 and 7.0900.”

Next 1-3 weeks: “We highlighted the increased downside risk yesterday and indicated ‘if USD closes below 7.0500, it could weaken to 7.0350’. USD subsequently dropped to 7.0458 before rebounding strongly to take out the ‘strong resistance’ level at 7.0800 (high of 7.0831). Downward pressure has eased and USD does not appear to be ready to move lower just yet. From here, USD is expected to trade sideways, likely within a broad 7.0400/7.1000 range.”

Eurozone monetary aggregate M3 growth accelerated sharply in June

According to the report from European Central Bank, the annual growth rate of the broad monetary aggregate M3 increased to 8.9% in May 2020 from 8.2% in April, averaging 8.2% in the three months up to May. The components of M3 showed the following developments. The annual growth rate of the narrower aggregate M1, which comprises currency in circulation and overnight deposits, increased to 12.5% in May from 11.9% in April. The annual growth rate of short-term deposits other than overnight deposits (M2-M1) increased to 0.7% in May from -0.3% in April. The annual growth rate of marketable instruments (M3-M2) stood at 5.8% in May, compared with 5.9% in April.

Annual growth rate of adjusted loans to households stood at 3.0% in May, unchanged from previous month

Annual growth rate of adjusted loans to non-financial corporations increased to 7.3% in May from 6.6% in April

Eurozone: M3 money supply, adjusted y/y, May 8.9% (forecast 8.6%)
Eurozone: Private Loans, Y/Y, May 3% (forecast 3.2%)
ECB president Christine Lagarde: We probably have passed the lowest point of the crisis, but cautious about possibility of a second wave of infections

  • Economic recovery will be sequential

  • The recovery will be a complicated matter, there is a lot of uncertainty

  • Savings grew substantially over the past two months

  • It will take a while before that translates back into investments, spending

  • Central banks have responded to the crisis in a 'massive' way

  • This crisis is worse than the 2008-09 financial crisis

  • The ECB mandate is the same i.e. focus on price stability

  • We have to use instruments that provide the most proportionate response

  • Needed to ensure that there was sufficient liquidity

  • Also needed to make sure that banks could continue lending to the economy

  • For once, monetary policy and fiscal policy worked hand in hand

Asian session review: the US dollar was trading steadily against the euro

TimeCountryEventPeriodPrevious valueForecastActual
06:45FranceConsumer confidence June939597

During today's Asian trading, the US dollar was almost unchanged against the euro and fell moderately against the yen.

The ICE Dollar index, which shows the value of the US dollar against six major world currencies, fell by 0.03% compared to the previous day.

The recent strengthening of the dollar was due to the fear that a rapid economic recovery may not be possible due to the growth of new infections in the world and the strengthening of quarantine measures, which may become necessary.

Texas Governor Greg Abbott on Thursday announced the suspension of plans to lift quarantine measures due to a jump in the number of sick and hospitalized.

Meanwhile, Bank of Japan Governor Haruhiko Kuroda said he was ready to step up stimulus measures amid the risk of a second wave of the COVID-19 coronavirus pandemic. He also noted that as the negative impact of the virus eases, the country's economy will gradually recover, which will allow the Central Bank to return to its goal of achieving a 2 percent inflation rate.

Next week, the next round of negotiations between the UK and the European Union on a post-Brexit trade agreement will start. On Thursday, the EU Council noted that the transition period after the UK leaves the EU will end on December 31 this year, as London has not expressed its intention to extend it.

French households confidence has rebounded in June

According to the report from Insee, in June 2020, with the end of the population containment, households’ confidence in the economic situation has rebounded: the synthetic index has gained 4 points. At 97, it nevertheless remains below its long term average (100).

In June, the share of households considering it is a suitable time to make major purchases has increased sharply. The corresponding balance has gained 31 points and returns to its long term average after five consecutive months of decrease.

Households' opinion balance on their future financial situation has also increased significantly (+12 points). It remains slightly below its average. The balance related to their past financial situation has lost 2 points but remains above its long-term average.

Households’ opinion balance related to their expected saving capacity has increased sharply. It has gained 9 points and remains above its long-term average.

Households’ opinion balance on their current saving capacity has also increased for the seventh consecutive month. It has gained 4 points and stands at its highest level since the beginning of the time series (1970).

In June, the share of households considering it is a suitable time to save has increased slightly: the corresponding balance has increased by one point but stays below its long-term average. 

France: Consumer confidence , June 97 (forecast 95)
UK car output slumps in May after coronavirus hit

According to the report from the Society of Motor Manufacturers and Traders (SMMT), UK car manufacturing output fell -95.4% in May with just 5,314 vehicles rolling off production lines. The performance was a slight improvement on April, when only 197 units were built but with factories still closed or running at reduced capacity it still marked the worst May since 1946.

While some two thirds of the UK’s automotive plants started getting back to business during the month, capacity was severely held back by social distancing requirements and reduced demand, with key global markets only just beginning to reopen and the UK remaining in lockdown. 4,260 cars were exported in May, most into the EU, the US and China, and with English car showrooms not reopening until 1 June, only 1,054 models were built for domestic buyers.

In the first five months, UK factories turned out 324,763 cars, representing a decline of -41.7% on the same period in 2019 and a loss of more than 230,000 units, with the full year outlook now expected to be fewer than one million units.2

Mike Hawes, SMMT Chief Executive, said: "May’s figures are yet more evidence of why the UK industry, like its global rivals, needs dedicated support to drive a successful restart. Government assistance so far has been vital in keeping many businesses afloat, but the job isn’t done. Measures to boost cashflow, including additional and tailored finance schemes, tax relief and business rates deferral would deliver immediate results when liquidity is most acute. We have to retain the highly skilled jobs the sector provides but also ensure the business conditions are competitive so we can unlock the investment that will drive long-term recovery – a green recovery – which is inextricably linked the sector’s success".

GBP/USD still looks rangebound near-term – UOB

FXStreet reports that cable is expected to extend the consolidation for the time being, according FX Strategists at UOB Group.

24-hour view: “Yesterday, we held the view that ‘the bias is for GBP to weaken but the major support at 1.2370 could be out of reach’. Our view was not wrong as GBP dipped to 1.2390 before recovering. The underlying tone still appears to be soft and from here, there is chance for GBP to drift lower towards 1.2370 (minor support is at 1.2390). For today, the prospect for a sustained decline below 1.2370 is not high. Resistance is at 1.2445 followed by 1.2470.”

Next 1-3 weeks: “The rapid manner by which GBP gave up most of its gains from Tuesday was not exactly expected. Our latest narrative from earlier on Tuesday (23 Jun, spot at 1.2485) was that GBP could ‘edge higher but any advance is viewed as part of a 1.2370/1.2610 range’. For now, there is no change in our view but after yesterday’s price action, the 1.2370 support appears to be vulnerable. Looking ahead, a clear break of this level would suggest GBP could weaken further to 1.2300. At this stage, the prospect for such a move is not high but it would continue to increase unless GBP moves and stays above 1.2520 within these 1 to 2 days.”

NZD/USD: Consolidation phase intact n-term before higher - Credit Suisse

eFXdata reports that Credit Suisse discusses NZD/USD technical outlook and adopts a neutral bias in the near-term.

"We look for the current rangebound environment to continue for now, however we eventually look for a break above .6554 and then the current June high at .6584. A sustained and closing break above here would reinforce thoughts of a broader change in trend to the upside, with resistance then seen at .6665," CS notes. 

"Support is around .6437, ahead of .6382/77, which ideally continues to hold. In contrast, a sustained close below here would now see a small top complete, with .6322/21 the next key support level to monitor," CS adds.

Options levels on friday, June 26, 2020 EURUSD GBPUSD


Resistance levels (open interest**, contracts)

$1.1288 (1231)

$1.1265 (1178)

$1.1244 (1507)

Price at time of writing this review: $1.1221

Support levels (open interest**, contracts):

$1.1198 (571)

$1.1171 (802)

$1.1135 (1043)


- Overall open interest on the CALL options and PUT options with the expiration date July, 2 is 52490 contracts (according to data from June, 25) with the maximum number of contracts with strike price $1,1700 (2278);


Resistance levels (open interest**, contracts)

$1.2607 (571)

$1.2525 (500)

$1.2468 (305)

Price at time of writing this review: $1.2431

Support levels (open interest**, contracts):

$1.2400 (1484)

$1.2371 (1331)

$1.2346 (724)


- Overall open interest on the CALL options with the expiration date July, 2 is 15738 contracts, with the maximum number of contracts with strike price $1,2800 (1689);

- Overall open interest on the PUT options with the expiration date July, 2 is 18592 contracts, with the maximum number of contracts with strike price $1,2550 (1484);

- The ratio of PUT/CALL was 1.18 versus 1.17 from the previous trading day according to data from June, 25


* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.

Commodities. Daily history for Thursday, June 25, 2020
Raw materials Closed Change, %
Brent 41.33 2.58
Silver 17.76 1.72
Gold 1763.571 0.16
Palladium 1838.06 -2.19
Stocks. Daily history for Thursday, June 25, 2020
Index Change, points Closed Change, %
NIKKEI 225 -274.53 22259.79 -1.22
KOSPI -49.14 2112.37 -2.27
ASX 200 -148 5817.7 -2.48
FTSE 100 23.45 6147.14 0.38
DAX 83.93 12177.87 0.69
CAC 40 47.22 4918.58 0.97
Dow Jones 299.66 25745.6 1.18
S&P 500 33.43 3083.76 1.1
NASDAQ Composite 107.84 10017 1.09
Schedule for today, Friday, June 26, 2020
Time Country Event Period Previous value Forecast
06:45 France Consumer confidence June 93 95
08:00 Eurozone Private Loans, Y/Y May 3% 3.2%
08:00 Eurozone M3 money supply, adjusted y/y May 8.3% 8.6%
12:30 U.S. PCE price index ex food, energy, Y/Y May 1% 0.9%
12:30 U.S. Personal spending May -13.6% 9%
12:30 U.S. PCE price index ex food, energy, m/m May -0.4% 0%
12:30 U.S. Personal Income, m/m May 10.5% -6%
14:00 U.S. Reuters/Michigan Consumer Sentiment Index June 72.3 79
17:00 U.S. Baker Hughes Oil Rig Count June 189  
Currencies. Daily history for Thursday, June 25, 2020
Pare Closed Change, %
AUDUSD 0.68855 0.26
EURJPY 120.19 -0.21
EURUSD 1.12121 -0.36
GBPJPY 133.058 0.09
GBPUSD 1.24162 -0.05
NZDUSD 0.64271 0.29
USDCAD 1.3633 -0.02
USDCHF 0.94873 0.16
USDJPY 107.155 0.13

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