Midday Analysis – 1st July 2020

Today’s Market Outlook

In the currencies’ markets overall, movements in this asset class since the opening of European sessions seemed rather mixed today. After an overall positive start to today’s Asia-Pacific session, the risk tone has gradually waned with indices largely off their best levels and some now negative for the day, alongside higher volatility and stronger safe-havens. JPY is currently the strongest in the FX complex with EURJPY breaking below 121.00 and GBPJPY testing but finding support at 133.00.  

Rebound in US stocks overnight didn’t carry forward to Asian session. In Japan particularly, seen the Nikkei weighted down by poor Tankan survey data. The US rally attempt was somewhat knocked down by uptrend resumption in Gold to the expected 1800 level. Recovery in oil prices also dragged down the USD while lifting the CAD. Focus will now turn to US ADP employment and ISM manufacturing, as well as tomorrow’s NFP. Hopefully, these data could trigger some meaningful breakouts in the markets. 

Looking to the rest of the trading sessions left for today, it will be best to pay closer attention to the overall risk tone with any further souring to a firmer risk-off tone likely to continue supporting JPY and its safe-haven counterparts.  

Today’s High Impact Events

The times below are GMT+3

15.00 – US ADP Employment Change

Looking forward, the ADP Employment Change in the United States is estimated to stand at 150.00 in 12 months’ time. In the long-term, the United States ADP Employment Change is projected to trend around 150.00 Thousand in 2021, according to various external econometric models. 

17.00 – US ISM Manufacturing PMI

Business Confidence in the United States is estimated to hold at 52.00 in 12 months’ time. In the long-term, the United States ISM Purchasing Managers Index (PMI) is projected to trend around 53.40 points in 2021 and 52.40 points in 2022, according to our econometric models. 

21.00 – US FOMC Minutes

The FOMC minutes today remains one of the top key risks event, carrying forward main topics from the June meeting. Of interest are the Fed members’ discussions on yield curve control, as mentioned by Fed Chair Powell in his prepared remarks at the press conference after the policy announcement. 

Coronavirus Status Update 

At present, the total number of officially confirmed global cases of the coronavirus stands at 10,592,660 from a total of 213 countries and territories. Of those cases, 6,315,728 are closed cases and resulted in 5,801,646 recoveries (92%) and 514,082 deaths (8%).  

Of the remaining 4,276,932 active cases, 57,850 are serious or critical (1%). Globally, the number of daily new cases continues to climb with a current peak of 195,083 on June 26th; although as of yesterday (June 30th), the 7-day moving average is at an all-time high of 175,395. 

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