In stock markets around the world, the boom continues after the March drop. Today, stock indices have grown both in Asia and Europe, and futures contracts in the United States show a record opening of the cash market. On the one hand, buyers are supported by the positive course of talks on the Washington-Beijing line and, on the other hand, by information on COVID-19 treatment.
Investors have received new information from AstraZeneca, whose early research shows that antibody and plasma therapy from the blood of those who have recovered gives hope for positive results in the future. Meanwhile, Moderna Inc. will supply 80 million doses of its experimental drug to the European Union, due to the positive results of recent research and major advances. While a wider use of plasma treatment has already been allowed by the FDA, the Trump administration is considering speeding up the use of the experimental vaccine from the UK. Additional support for risk appetite may also be provided by information from Tokyo. The city reported 95 new cases of coronavirus on Monday, which is the lowest daily cases since 8 July.
Chinese Deputy Prime Minister Liu spoke on the phone to US Trade Representative Robert Lighthizer and Secretary of the Treasury Steven Mnuchin, Xinhua said. The two sides were to hold a constructive discussion on enhancing macroeconomic policy coordination and implementing phase one of the trade agreement. China and the United States agree to create the conditions to accelerate the implementation of phase one of the agreement, according to press reports.
Increased risk appetite also seems to lead to changes in the currency market. The US dollar has started to lose value after a few days of correction. The EUR/USD exchange rate defended support in the area of 1.1750 and is now above 1.1820, while the GBP/USD pair is again approaching a level of 1.3100. The improvement in sentiment also seems to be cooling hot markets such as gold and silver. These metals are being consolidated at USD 1930 and USD 26.50 respectively.
It may also be important for the markets to wait for the symposium in Jackson Hole, organized every year by the Fed branch in Kansas City. This year it will be an online conference, which can be watched on YouTube. The symposium is important because it is attended by central bankers from all over the world, and support for economic growth and financial markets depends on them.
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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