Daily Market Commentary July 7th 2020

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Global markets surged to welcome the new week, despite large increases in the spread of the coronavirus, in the Southern US States. Chinese stock markets rallied over 5%, while Europe followed the trend, with economic data confirming strong results, as global economies reopen. The US followed suit, with the tech-heavy NASQAQ hitting new record highs, following last weeks massive gains and historically high labour market numbers. The US Non-Manufacturing PMI spiked up to 57.1, confirming the ‘V-shaped’ recovery. The Dollar continued to ease, with the EUR regaining 1.1300, while the GBP approaches 1.2500.

The trade exposed commodity currencies were also boosted by the strong gains in China, pushing the AUD up to 0.6970, while the NZD hit 0.6550. The local markets await the important RBA decision, although no rate moves are expected, the commentary and intentions remain an important market indicator. Australian job advertisements jumped 42%, reflecting the stronger economy and tighter labour market, due to attractive welfare support payments.

The commodity currencies are currently beneficiaries of the easing reserve, as market confidence surges, but remain vulnerable to the Chinese Geo-Political aggression and the global consequences.