Markets Torn Between Robust Economic Data and Rising Virus Cases


© Reuters.

(Bloomberg) — Global markets are caught in a tug-of-war between optimism over better-than-expected economic data, and concern over the surge in coronavirus infections.

While currencies saw muted moves in early trading on Monday, the Australian dollar underperformed, dropping as much as 0.2%. The nation has seen a rise in infections recently. The big worry, however, is the U.S., where a surge in cases pushed global figures above 11.3 million.

Even though U.S. labor data showed a marked improvement in June, the dollar fell last week, ending the currency’s longest-winning streak since January. The Citi Economic Surprise Index for the nation soared to a record, while a similar gauge for major economies is at the highest level since 2017.

It’s a push and pull between positive and negative numbers that has lasted for weeks, said Stephen Innes, chief global markets strategist at AxiCorp, adding that markets may be headed for a “Let’s Make a Deal” moment, referencing a popular game show in the U.S. that started in the 1960s.

“Behind door number one sits the all-in trade from a vaccine discovery,” said Innes. “Behind door number two lies the relatively optimistic economic outcome, but it’s door number three, where the prophet of doom sits reminding us the virus risk will lead to a more significant growth hit in the third quarter.”

Economic releases from developed nations through Friday may help investors decide. Germany’s industrial production probably bounced back in May, as did Italian retail sales, based on estimates compiled by Bloomberg. PMI data from the U.S. may show a minor improvement.

See also  The Real 2020 Divide

©2020 Bloomberg L.P.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





READ SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here