Europe Lower As Second Wave Fears Grow, UK GDP Misses
Fiona Cincotta June 12, 2020 3:05 PM
European markets are looking to extend losses by around 0.5%, however US futures are pointing to a more upbeat start.
After Thursday’s seismic risk off selloff, which saw stocks and oil crash, and safe havens rally, markets are trying to stabilise. European markets are looking to extend losses by around 0.5%, however US futures are pointing to a more upbeat start.
Coronavirus numbers are still elevated, with the grim milestone of 7.5 million cases globally being breached. Concerns are growing of a second wave in the US where over 20 states have started to see an increase in covid-19 cases following 5 weeks of falling numbers. Local officials have mention restarting lockdown measures. However, US Treasury Secretary Steve Mnuchin has warned that there won’t be a repeat of the stay at home order, given the impact that it would have on the US economy. The very prospect of another round in the ring with covid-19 sent investors rushing for cover in safe haven assets. The threat of a second wave could dampen the prospect of any push higher in riskier assets and promote a period of consolidation whilst trades wait to see how it plays out.
The UK economy contracted by a worst than -20.4% mom in April versus -18.4% expected and down from -5.8% in March. Unsurprisingly retail, travel and hospitality were worst hit, although manufacturing and construction also see significant hits, as the data reflects a full month of lockdown and highlights the uphill struggle that the economy now faces to get back on track. The Pound has shrugged of the record break collapse in economic activity to a degree this is old news and finally marks the nadir.
US Consumer confidence
Looking ahead US consumer confidence data will be in focus as investors attempt to gauge whether US consumer are ready to get shopping to reigniting the US economy. Expectations are only for a slight lift in morale in June to 75, up from 72.3 in May. A much stronger reading could do some heavy lifting in the market. However, a weaker number could fuel fears over the economic outlook, dragging stocks lower and boosting the safe haven USD.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.
Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.