Wednesday brings another improvement in sentiment - especially in the stock market, where indices or futures are climbing to higher levels. It seems that the main factor causing the return of optimism is further information about the coronavirus vaccine, which is being developed by the American company Moderna.
Later on Tuesday evening, Moderna reported that the COVID-19 vaccine produced antibodies in early clinical trials in all 45 tested patients. On the one hand, positive information this week has come to light about the successful treatment of COVID-19 with remdesivir, and on the other hand, there is better information about the vaccine.
However, for indices and stocks, quarterly results of Wall Street companies may be more important. Only today we will get the reports of Goldman Sachs, US Bancorp or IBM. An additional factor that may also influence investors is a further increase in tension between Washington and Beijing. President Donald Trump signed a law imposing sanctions on Chinese officials. It was a response to the Chinese security law in Hong Kong.
For investors, in addition to the European Central Bank's decision on Thursday, the key event this week may also be the plan to rebuild the European economy after the crisis caused by the epidemic. Italian Prime Minister Giuseppe Conte said on Wednesday that the Council of the European Union must decide on the plan by the end of July. There is little time left and the substance of the matter is enormous.
In the currency market, the British pound seems to be strengthening significantly as sentiment has improved, as well as better data on inflation has been published. The GBP/USD exchange rate has again exceeded 1.2600. Inflation unexpectedly picked up in June, with clothing and game prices rising. The price increase could be a potential argument for postponing further monetary easing by the Bank of England, which could favor the pound.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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