Daily Market Commentary 6th August 2020

Equity markets continued to surge, supported by massive monetary stimulus and improving economic data. European markets rallied after some stronger Composite and Services PMI data, while EU Retail Sales posted gains. US share markets continued to rally and confidence grew, shaking off worries over the pandemic and sucking up massive fiscal and monetary stimulus. ISM non-Manufacturing expanded, while US PMI data was flat and the ADP Jobs Report was a big miss, on expectations. This could be a warning signal for the all important Non-Farm Payrolls report. The rising sentiment allowed the USD to decline, with the EUR jumping to 1.1860, while the GBP rallied to 1.3115.

New Zealand employment data surprised markets, with the headline Unemployment rate falling from 4.2%, to 4%. It must be noted that this does not include anyone not actively seeking work, so the masses on Government support are not included. Australian PMI data continued to improve, although their will be a price to pay, for the renewed Victorian lock-down. The flagging reserve, allowed the NZD to rally to 0.6630, while the AUD looks to regain 0.7200.

The virus and the impact on the economic re-opening, will drive markets, as the focus returns to the all important US Employment data.