Daily Market Commentary 15th July 2020

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US equity markets rallied once again overnight, booking huge gains, funded by the unprecedented ocean of cheap liquidity. US stock markets surged again, despite record virus infection levels and closedowns now happening in California. The spread of the virus is dramatic, as record testing is being implemented, across the USA. The infection levels are problematic, while hospitalisations remain important, but the mortality rate remains extremely low. Treatments are improving in effectiveness, while the younger demographic are the ones becoming infected and they are strongly resistant. The market is telling the story.

The rising market confidence has allowed the USD to ease, with the EUR rising back to 1.1400, while the Yen trades 107.20. The GBP continues to suffer, falling to 1.2550, despite the weaker reserve. UK data is turning positive but remains devastatingly weak, following the strict lock-down laws. UK GDP popped back to 1.8% for the month, but has contracted 24% for the year, while Industrial and Manufacturing Production has contracted more than 20%!

The resumed lockdown in Melbourne has put downward pressure on the economy and the currency. The AUD fell during local trade, but the softer reserve. allowed a recovery back to 0.6960. The NZD did not benefit the same recovery as political turmoil continues. The NZ opposition National Party has selected another new leader, for the second time in recent months, with only two months until the general election! The NZD trades 0.6525 and must be looking for some consolidation?