Daily Market Commentary July 9th 2020

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US Coronavirus blew through 3 million infections and worry certain segments of the market. European markets lost ground, worried about the fallout on the global economy and the threat to the re-opening. The US completed their formal withdrawal from the WHO, while the WHO warned that the virus may be an airborne transmission, contradicting previous advice. The IMF sent out a warning that global debt may need re-structuring, as global deficit and debt surges, signalling where the origin of the next economic crises? The US Dollar was softer, with the EUR trading 1.1330, while the GBP broke back above 1.2600!

The China situation is simmering, as their aggressive muscle-flexing in the region, attracts a more unified response. The US, UK , Australia and other European nations look set to stand up with various sanctions on China, to deter their behaviour. This is where Geo-Political tensions are on the rise and could easily spill into the trading markets, disrupting the supply chain. The flagging reserve allowed the commodity currencies to post further gains, with the AUD trading 0.6975, while the NZD pushed up above 0.6560.

The pandemic remains the focus of markets and the sheer numbers are disturbing, but plummeting mortality rates, calms the fear. The real concern is trade and perhaps the mounting global deficits and debt, although the pressure remains low, while interest rates are held at historical lows.