Daily Market Commentary 30th of June 2020

US stock markets rebounded strongly to open the week, after suffering big losses, last Friday. The surge in coronavirus cases across the US, triggered a big sell-off, in equity markets. The surge in infection levels continued, but much of these are due to ramped up testing, while the mortality rate remains low. The wider population is being tested and diagnosed, but the infection levels in the younger demographics are not often fatal. Markets shrugged off the numbers and rallied strongly. The Dollar attracted renewed attention, as the EUR fell back to 1.1230, while the GBP dropped below 1.2300.

The economic data is coming off record lows, reflecting the various re-opening of economies, across the world. NZ and Australian infection levels re-emerged, contradicted the narrative of ‘defeating the virus’, which have been pushed by Governments. The virus has sparked local doubts about the strategy used to combat the virus, especially after suffering severe lockdowns. The AUD trades around 0.6850, while the NZD attempt to hold 0.6400, in the face of a rising reserve.

The virus remains a threat, across the globe, but trade with China may be the big threat in the coming trading week?