Tin tức thì trường

• UK refuses to commit to level playing field but at the same time requests special status of being very close to EU single market on financial services
• UK also wants to keep benefits of single electricity market without any obligations
• Doesn't think UK talks would have made much more progress by now "even without coronavirus crisis"
• We will do everything in our power to reach agreement
• We will never sacrifice EU's long-term economic and political interest for sole benefit of UK
• We will not put into question our union, single market and capacity to set our own rules
• Deal with UK is still possible
• UK keeps on backtracking from commitments in political declaration
• In the last round, we made a number of openings in key areas but UK showed no willingness to engage

The U.S. Energy Information Administration (EIA) revealed on Wednesday that crude inventories rose by 1.442 million barrels in the week ended June 19. Economists had forecast an increase of 0.367 million barrels.

At the same time, gasoline stocks fell by 1.673 million barrels, while analysts had expected a drop of 1.304 million barrels. Distillate stocks increased by 0.249 million barrels, while analysts had forecast a decline of 0.620 million barrels.

Meanwhile, oil production in the U.S. climbed by 500,000 barrels a day to 11.000 million barrels a day.

U.S. crude oil imports averaged 6.5 million barrels per day last week, down by 102,000 barrels per day from the previous week.

• 2021 global growth is projected at 5.4% compared to +5.8% in April

In its June World Economic Outlook (WEO), the IMF notes:

• COVID-19 pandemic has had more negative impact on activity in H1 2020 than anticipated, and recovery is projected to be more gradual than previously forecast
• Growth in advanced economy group is projected at –8.0 percent in 2020, 1.9 percentage points lower than in April forecast
• Growth in the group of emerging market and developing economies is forecast at –3.0 percent in 2020, 2 percentage points below the April forecast
• In China, where  recovery from the sharp contraction in Q1 is underway, growth is projected at 1.0 percent in 2020
• Second outbreak could lead to a decrease in world output of about 4.9 percent in 2021, relative to the baseline
• Downside risks, however, remain significant
• More prolonged decline in activity could lead to further scarring, including from wider firm closures, as surviving firms hesitate to hire jobseekers after extended unemployment spells, and as unemployed workers leave labor force entirely
• Further effective policy actions can help slow the deterioration and set the stage for  speedier recovery that benefits all in society across income spectrum and skills distribution
• Development of a safe, effective vaccine would lift sentiment and could improve growth outcomes in 2021

• In light of highly valued Swiss franc, SNB remains willing to intervene more strongly in the foreign exchange market
• SNB’s expansionary monetary policy helps stabilise economic activity and price developments in Switzerland
• In current situation, inflation and growth forecasts are subject to unusually high uncertainty
• Inflation rate seen to be negative (–0.7%) this year, and is likely to rise in 2021, but still be slightly negative (–0.2%), before returning to positive territory in 2022 (0.2%)
• Coronavirus pandemic has pushed global economy into sharp recession
• Decline in global GDP is likely to be even more pronounced in Q2
• In its baseline scenario for global economy, SNB anticipates that further waves of infection will be successfully prevented
• Global production capacity will probably be underutilised for some time yet, and inflation is likely to remain modest in most countries
• Baseline scenario is subject to high level of uncertainty on upside and downside alike
• Swiss economy is also in sharp recession
• Although downturn set in only in March, GDP was already 2.6% lower in Q1 than in the previous quarter; decline in GDP is likely to be even stronger in Q2
• SNB anticipates that there will be only partial recovery for the time being, and GDP will not return quickly to its pre-crisis level
• Economic revival in Q2 of the year is likely to be reflected in clearly positive growth in 2021

U.S. stock-index futures fell on Wednesday amid increased worries about the continued spread of the coronavirus and its impact on global economic recovery. 

Global Stocks:

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

Morgan Stanley (MS) upgraded to Buy from Neutral at DA Davidson; target $58

• Warns that the pandemic is accelerating
• Says all African countries have developed laboratory capacity to test for coronavirus

EUR traded flat against most other major currencies in the European session on Wednesday, as investors weighed improving economic data and a worrying rise in coronavirus cases. The EU single currency, however, fell against USD but rose against NZD, which remained under pressure after the RBNZ noted that the balance of economic risks remains to the downside and said that it was prepared to use additional monetary tools as necessary.

The latest survey by the ifo Institute revealed that Germany's business sentiment strengthened at a record pace in June on improved expectations as the coronavirus-related lockdown measures were eased across Europe. The Ifo Business Climate indicator for Germany jumped 6.5 points from the previous month to a four-month high of 86.2 in June, recovering further from an all-time low reached in April. Economists had forecast a score of 85. According to the report, the current conditions index climbed to 81.3 from 78.9 in May, while economists had expected a score of 84. At the same time, the expectations measure surged to 91.4 from 80.5 in May, while economists had forecast a reading of 87.

However, optimism was tempered by worries about the continued spread of the coronavirus and its impact on economic recovery. According to the Johns Hopkins Center for Systems Science and Engineering, the total number of confirmed global cases of the COVID-19 rose to 9,273,773, with the U.S. reporting 2,347,102 coronavirus cases, the most in the world. 

Bloomberg's report that the U.S. wants to impose new tariffs on $3.1 bln worth of imports from the EU and the UK also weighed on market sentiment.

Markets also continued to expect the European leaders to reach a compromise or agreement on the recovery fund. The EU heads are set to meet in Brussels on July 17-18 to discuss the EU recovery plan and long-term budget.

The ECB’s chief economist Philip Lane noted today that an outcome of EU recovery fund negotiations is an important factor affecting recovery of the European economy.

We need to remain vigilant, local councils will be supported in implementing local lockdowns

We have a very effective cluster-busting operation to tackle localised flare-ups of COVID

No country has a working contact-tracing app yet

The Mortgage Bankers Association (MBA) reported on Wednesday the mortgage application volume in the U.S. fell 8.7 percent in the week ended June 19, following an 8.0 percent surge in the previous week.

According to the report, refinance applications decreased 11.7 percent, while applications to purchase a home fell 3.0 percent.

Meanwhile, the average fixed 30-year mortgage rate remained at a record low 3.30 percent.

“One factor that may potentially crimp growth in the months ahead is that the release of pent-up demand from earlier this spring is clashing with the tight supply of new and existing homes on the market,” noted Joel Kan, an MBA economist. “Additional housing inventory is needed to give buyers more options and to keep home prices from rising too fast.”

FXStreet reports that FX Strategists at UOB Group suggest that cable’s price action in the next weeks is expected to navigate between 1.2370 and 1.2610.

24-hour view: “We highlighted yesterday ‘the robust recovery in GBP has room to extend to 1.2525’. We added, ‘the next resistance at 1.2565 is unlikely to come under threat’. Our view was not wrong as GBP rose to 1.2532 before ending the day on a firm note at 1.2520 (+0.39%). Upward momentum has improved, albeit not by much. From here, GBP could edge above 1.2565 but any advance is unlikely to challenge the solid resistance at 1.2610. Support is at 1.2490 but only a move below 1.2445 would indicate the current upward pressure has eased.”

Next 1-3 weeks: “After closing lower for a few days in a row, the sudden snap back in GBP that sent it soaring to an overnight high of 1.2477 came as a surprise (GBP closed at 1.2471, up by +0.99%, the biggest 1-day gain in 3 weeks). The strong rebound indicates that the recent weak phase in GBP ended ‘prematurely’. In other words, yesterday’s 1.2337 low was the extent of the decline (we were expecting a move to 1.2320). Downward pressure has dissipated and upward pressure is beginning to build up. From here, GBP could edge higher but any advance is viewed as part of a 1.2370/1.2610 range. To put it another way, a sustained advance above 1.2610 is not expected for now.”

Carsten Brzeski, the Chief Economist and Global Head of Macro for ING Research, suggests that optimism in Germany is back as the Ifo index continues to surge on the back of significantly improved expectations.

"Germany’s most prominent leading indicator has just staged another strong comeback. The Ifo index increased to 86.2 in June, from 79.5 in May." 

"Particularly expectations surged, while the current assessment component was still muted. Expectations increased to 91.4, from 80.1 in May, and have almost returned to their February level."

"At 81.3, from 78.9 in May, the current assessment component is still far below levels seen at the start of the year, when it was close to 100."

"The problem with soft indicators these days is that they give a good impression of the relative change but should be taken with a huge pinch of salt when it comes to their predictive power of actual GDP growth outcomes."

"Still, today’s Ifo index echoes more real-time signals that economic and social activity has started to pick up significantly since the first lifting of the lockdown measures in late April. Some sectors have seen activity returning to up to 90% of January/February levels. However, it is currently still impossible to measure the more permanent damage the crisis has caused and what its impact will be on future growth."

"Looking ahead, higher unemployment, insolvencies and weak external demand are likely to put a cap on the pace of the recovery once the technical v-shaped rebound is behind us. In this regards, the government’s latest fiscal stimulus should help, not only to support domestic demand but also to accelerate the necessary structural change of the economy."

"In the shorter run, the main risk for the German economy seems to be a second virus wave, together with the prospects of a second lockdown."

According to Bloomberg, the notice published by the U.S. Trade Representative (USTR) says that U.S. wants to impose new tariffs on European exports like olives, beer, gin and trucks, while increasing duties on products including aircrafts, cheese and yogurt.

The U.S. is also looking to target European luxury goods and this it could hammer European luxury brands like Givenchy and Hermes, which produce leather goods, and Remy Cointreau and Pernod Ricard, which make cognac and champagne. LVMH Moet Hennessy Louis Vuitton would be particularly vulnerable because it produces a wide array of these products.

The notice also makes mention to the 15-year-old World Trade Organization (WTO) aircraft subsidy fight between the U.S. and the EU.

Bloomberg notes that the latest USTR notice is a reminder that the U.S.’s tariff targets may shift or be subject to higher levies - a strategy that spreads the sanctions pain across an array of industries, creating uncertainty for businesses and headaches for exporters and importers alike.

FXStreet reports that economist at UOB Group Barnabas Gan assessed the latest inflation figures in Singapore.

“Singapore’s headline consumer prices fell 0.8% y/y +0.5% m/m sa) in May 2020, marking its third straight month of deflation. Core prices also fell by 0.2% y/y over the same period (versus -0.3% y/y in April 2020).”

“Given that the circuit breaker lasted for the whole of May 2020, it is unsurprising to see lower consumer prices during the period. Lower consumer demand as well as falling transport prices were the key drivers for the deflation.”

“Official rhetoric by the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) as released in the accompanying inflation report continued to highlight a “subdued” inflation outlook in 2020.”

“We view that deflation pressures may gradually dissipate in 2H20, given earlier than-expected implementation of Phase Two in Singapore on 19 June 2020 and the gradual return of international travel. We expect a pick-up in retail sales especially during Phase Two, as retail businesses, F&B dine-ins, personal health & wellness, home-based services, and public places such as parks and facilities are allowed to re-open. Separately, the reciprocal lifting of travel restrictions, or known as “green lanes”, could also gradually attract more international arrivals into Singapore.”

Bloomberg reports that a quarter of furloughed workers in the U.K. are likely to lose their jobs when the government begins reducing the amount it pays out to those on the program in September, a poll of employers shows.

Prime Minister Boris Johnson is pushing ahead with reopening the economy, hoping to save as many jobs as possible. Fears about lasting economic damage from the pandemic remain high in the small business sector, with the majority saying it could take one to two years to get back to normal, according to the survey of 2,000 businesses on behalf of London-based lender MarketFinance Ltd.

The Bank of England is increasingly worried that U.K. job losses from Covid-19 will turn out worse than expected, threatening the economic recovery. More than 9 million people have been furloughed under the government’s Coronavirus Job Retention Scheme alone, and the total number of workers on the programs is higher than the central bank expected.

Working with banks and alternative lenders, the government’s support programs have provided 40 billion pounds ($50 billion) in emergency loans to 970,000 firms, according to industry group UK Finance.

Other findings in the survey include:

Nine in 10 companies are still waiting to be paid for work performed before the virus hit the economy in March, and the lost cash flow may undermine efforts to rehire employees.

About 45% of companies anticipate bringing back as many as half their furloughed staff in July.

Companies are still waiting to be paid an average of 148,917 pounds on average for work delivered to customers before the lockdown in March.

The poll of 2,000 U.K. companies that employ between 1 and 249 people was conducted from June 17 to June 20 by LM Research & Marketing Consultancy.

Reuters reports that the Bank of Japan on Wednesday offered 8.28 trillion yen ($77.74 billion) in loans to financial institutions under a new lending programme aimed at channeling funds to cash-strapped firms hit by the coronavirus pandemic.

The three-month loans will be extended on Thursday through Dec. 25, the central bank said.

Wednesday's market operation was the first to be offered since the BOJ combined several facilities in May to create a single lending programme aimed at pumping money to pandemic-hit firms via financial institutions.

The central bank has said it expects the amount of money to be pumped out via the programme to eventually reach 110 trillion yen.

The BOJ eased monetary policy in March and April, pledging to buy more assets, gobble up unlimited amounts of government debt and create lending facilities to channel money to firms.

The number of participants surged to 180 from just 18 in March, after the BOJ decided to pay a 0.1% interest to financial institutions that tapped the programme - effectively subsidising them for taking up loans from the central bank.

Reuters reports that China's state planner on Wednesday published the 2020 negative list for foreign investment, reducing the number of items on the list to 33 from 40 the previous year.

Foreign ownership caps on in brokerages, futures companies and life insurance companies would be removed, the National Development and Reform Commission said in a statement on its website, while ownership by foreign investors in wheat breeding, seed production would be raised to 66%.

The so-called negative list specifies industries where activities by foreign investors are either restricted or prohibited.

FXStreet reports that USD/CNH could weaken further on a close below the 7.0500 level, noted FX Strategists at UOB Group.

24-hour view: “Expectation for USD to strengthen was wrong as it traded in a volatile manner between 7.0510 and 7.0884. Downward pressure has picked up and from here, a break of 7.0500 could lead to further USD weakness towards 7.0450. For today, 7.0350 is likely out of reach. Resistance is at 7.0620 followed by 7.0690.”

Next 1-3 weeks: “We have held the same view since last Monday (15 Jun, spot at 7.0880) that USD is in a consolidation phase and is likely to trade between 7.0500 and 7.1250. USD subsequently traded mostly sideways but dropped to low of 7.0510 yesterday. Downward momentum is stirring to life and from here, if USD closes below 7.0500, it could weaken to 7.0350. The prospect for such a scenario is quite high and it would continue to increase unless USD moves back above 7.0800 within these few days.”

According to the report from Ifo Institute, the German business climate index rose to 86.2 in June from 79.5 in May. The index was expected to be 85.0. The expectations component was 91.4 compared to 87.0 for forecasts and 80.1 in May. The current situation assessment component rose to 81.3 from 78.9 in May. The index was expected to be 84.0.

Commenting on the latest data, German Ifo economist Klaus Wohlrabe said that we have passed economic trouble, economy on upward path now.

"Expects growth again from Q3, of around 7%. German business sees light at the end of the tunnel. Economy probably shrank by double-digits in Q2. Industrial sector is still very bad, especially in engineering. But export expectations have risen significantly", - Wohlrabe said.

According to the report from Insee, in June 2020, the business climate has recovered very clearly, in connection with the acceleration of the lockdown exit. The indicator that synthesizes it, calculated from the responses of business managers from the main market sectors, has gained 18 points, its largest monthly increase since the start of the series (1980).

At 78, the business climate has exceeded the low point reached in March 2009 (70), but remains far below its long-term average (100).

This sharp rise in the overall synthetic indicator is explained in particular by the more optimistic view that companies have on their activity prospects, in all sectors, under the effect of the the lockdown exit. Conversely, the balances of opinion relating to activity in the past three months remain very low.

In June 2020, the employment climate has continued to recover. The composite indicator has risen by 13 points, its largest monthly increase since the start of the series (1991), amplifying the rebound that began in May after an unprecedented fall in April. At 66, the employment climate still remains far below its May 2009 low (73), and, a fortiori, its long-term average (100).

The dollar was under pressure on Wednesday, after positive data in Europe boosted the Euro and helped raise hopes for a global economic recovery,

According to the report from IHS Markit, the flash Eurozone Composite PMI beat expectations, reaching 47.5, compared with 31.9 in May. While this is still below the 50 mark that separates growth from decline, improving business sentiment - along with upbeat data in the UK and US - has supported the sense that growth is returning at a pace.

The next important release will be the German business survey at 08: 00 GMT, when markets expect another strong rebound. Markets expect another strong rebound of indicators from the IFO.

The New Zealand dollar fell to $ 0.6468 after the New Zealand's central bank said the balance of economic risks remains negative and it is ready to use additional monetary instruments as needed. However, the RBNZ decided to hold its interest rate at a record low 0.25 percent. The asset purchase programme was retained at NZ$60 billion after raising it from GBP 33 billion last month.

FXStreet reports that further downside in USD/JPY is seen meeting solid contention in the 106.00 neighbourhood, suggested FX Strategists at UOB Group.

24-hour view: “After trading quietly for several days, USD was jolted wide awake yesterday as it traded in a volatile manner and within a broad range of 106.06/107.21 before settling at 106.51 (-0.34%). The choppy and rapid swings have resulted in a mixed outlook. For today, further volatile price action is not ruled out but USD is likely to stay within yesterday’s broad range of 106.06/107.21.”

Next 1-3 weeks: “We have held the same view for about 2 weeks wherein USD is under mild downward pressure and only a daily closing below 106.70 would indicate that it could weaken to 106.00. After trading in a muted manner for several days, USD woke up with a jolt as it dropped to 106.73 early yesterday, snapped back up to 107.21 before plunging overnight to a low of 106.06. The daily closing at 106.51 (-0.34%) is on the soft side and the risk from here is for USD to weaken. A break of the solid support at 106.00 is not ruled out but this level could remain intact for a few more days. Looking ahead, a break of this level would shift the focus to 105.50. On the upside, the ‘strong resistance’ level has moved lower to 107.20 from yesterday’s level of 107.40. On a shorter-term note, 106.95 is already quite a strong level.”

Reuters reports that French President Emmanuel Macron and Dutch Prime Minister Mark Rutte were able to move forward during talks to resolve differences over the European Union budget and recovery fund, a French presidential official said on Wednesday.

Macron travelled to the Netherlands on Tuesday evening to try to break Rutte’s resistance to the European Union’s 750 billion euro ($848.18 billion) aid package that the French president wants to see approved at an EU summit in July.

“This exchange made progress,” the official said, adding that the objective remained to achieve a European accord by that date.

Rutte has led a coalition of fiscally conservative northern European countries opposed to the proposed recovery fund, which would see the EU raise debt and transfer cash to the countries hardest hit by the economic fallout of the coronavirus crisis.

“We have always been able to find constructive agreements with the Dutch prime minister,” Macron said on Twitter after the meeting. “We have European fibre, we know that we are stronger together. I am confident that we will find common ground on the European recovery plan.”

Rutte, who wants the transfers to take the form of repayable loans rather than grants, hosted Macron in The Hague, followed by a working dinner.

FXStreet reports that in opinion of FX Strategists at UOB Group, AUD/USD remains locked within the 0.6800/0.7010 range.

24-hour view: “Yesterday, we held the view that AUD ‘could extend its gain but a break of 0.6975 appears unlikely’ AUD subsequently plummeted to 0.6858 before snapping back up and rose to an overnight high of 0.6974. While upward momentum still appears to be strong and AUD could move above 0.6975 from here, it is left to be seen if it can maintain a toe-hold above this level. For today, the next resistance at 0.7010 is unlikely to come into the picture. Support is at 0.6910 followed by 0.6880.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (23 Jun, spot at 0.6920). As highlighted, the recent downward pressure has dissipated and from here, AUD is expected to consolidate and trade between 0.6800 and 0.7010. Looking forward, the upside risk appears to be greater but AUD has to close above 0.7030 in order to indicate that it is ready to move above the 0.7067 peak registered earlier this month.”

RTTNews reports that New Zealand's central bank maintained its interest rate and quantitative easing unchanged as social restrictions to contain the spread of coronavirus were relaxed and domestic operations resumed earlier than expected.

The Monetary Policy Committee of the Reserve Bank of New Zealand, on Wednesday, decided to hold its interest rate at a record low 0.25 percent.

The asset purchase programme was retained at NZ$60 billion after raising it from GBP 33 billion last month.

However, the MPC said it is prepared to provide additional stimulus as necessary. As well as potentially expanding the large scale asset purchase programme, the committee continues to prepare for the use of additional monetary policy tools as needed.

The bank observed that the severe economic disruption caused by the coronavirus, or Covid-19, pandemic is persisting, leading to lower economic activity, employment and inflation. Further, the negative impact was exacerbated by the border restrictions and the appreciation of the New Zealand dollar.

The support for the domestic economy was appropriately being provided through increased fiscal spending. However, monetary policy will continue to provide significant support.

Members noted that the extent of recovery will depend in part on the impact of these policy measures and the speed with which they are implemented.

The central bank sounded fairly balanced when it left policy settings unchanged today, Ben Udy, an economist at Capital Economics, said. But the bank is likely to cut rates into negative territory next year.

EUR/USD

Resistance levels (open interest**, contracts)

$1.1431 (1208)

$1.1399 (1423)

$1.1374 (1965)

Price at time of writing this review: $1.1323

Support levels (open interest**, contracts):

$1.1284 (308)

$1.1259 (2084)

$1.1226 (627)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date July, 2 is 51490 contracts (according to data from June, 23) with the maximum number of contracts with strike price $1,1700 (2278);

GBP/USD

Resistance levels (open interest**, contracts)

$1.2611 (360)

$1.2588 (499)

$1.2571 (324)

Price at time of writing this review: $1.2518

Support levels (open interest**, contracts):

$1.2488 (1010)

$1.2467 (1487)

$1.2440 (873)

Comments:

- Overall open interest on the CALL options with the expiration date July, 2 is 15247 contracts, with the maximum number of contracts with strike price $1,2800 (1691);

- Overall open interest on the PUT options with the expiration date July, 2 is 18358 contracts, with the maximum number of contracts with strike price $1,2550 (1487);

- The ratio of PUT/CALL was 1.20 versus 1.21 from the previous trading day according to data from June, 23

* - 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.