Weekly Market Commentary 13th July 2020

US equity markets rallied strongly to close out a volatile week. European markets rallied on strong industrial production numbers from Italy and France. Italian and French Industrial Production surged, smashing market expectations, reflecting the re-opening in their economies. US Markets have been weighed down by the surging viral infections, but this was tempered overnight, as Gilead announced successful results from their drug ‘remdesivir’. The rally allowed the resurgent US Dollar to settle, with the EUR regaining 1.1300, while the GBP pushed up to 1.2625.

The coming week has a plethora of global economic data releases, headlined by Central Bank commentary and rate decisions from the Bank of Japan and the ECB. There is also major public speeches from Fed and ECB members . The EU are working on a massive EUR 750 Billion stimulus/bailout package, which will need to be completed in the coming week? Mixed in with economic data and Central Bank commentary, will be all the Geo-Political developments. Pressure is mounting on China from the US, European Nations and Australia and the repercussions will be far-reaching and significant, which will impact trade.

Commodity currencies remain in the ascendency, but are seriously vulnerable to any disruptions to the existing supply chain. Chinese actions and reactions will be key, but they do not appear to have an inclination to back down from their aggressive mood . The AUD will open the week trading around 0.6950, while the NZD holds above 0.6550, receptive to macro-market moves.