The June Quarter finished strongly around the globe, as economies re-open and the virus is contained, allowing a V-shaped’ recovery. The surge in infection rates in the USA and hotspots around the globe, seem to be contained and under control. The surge is due to massive increases in testing, while the infected are in the healthier younger demographic, allowing mortality rates to fall. US equities celebrated the best Quarter in more than 20 years, as businesses re-open and the Central Bank monetary stimulus takes effect. The Dollar was steady, with the EUR trading 1.1230, while the GBP jumped back to 1.2370.
Chinese Manufacturing and Non Manufacturing data, continued to show strength, but was overshadowed by the Chinese imposing Security legislation on Hong Kong, limiting their autonomy. This, combined with many Geo-Political issues concerning the Chinese, are a huge threat to world security and trade. This is where the real threat lies to the trade exposed commodity currencies. The AUD pushes up towards 0.6900, while the NZD consolidated above 0.6400, despite a weak Business Confidence data released during yesterdays trade.
The Treasury Secretary Mnuchin and Fed Chair Powell appeared in front of the House Finance & Security Committee overnight and had diverging views of the US economic recovery. The Fed Chair was warning of uncertainty and risks to the recovery, while the Treasury Secretary was far more upbeat. Mnuchin cited the strong recovery in the labour market and expected a significant improvement in the second half of 2020.