Forex Today: Risk-On Sentiment Strong Despite U.S. Rioting – 01 June 2020

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on June 01, 2020

Daily reported coronavirus deaths hit an all-time high over the weekend. Daily deaths globally peaked on April 18th and daily new confirmed cases peaked on 30th May.

  • Stock markets are rising. The U.S. market indices remain firm and bullish, with the S&P 500 Index closing last week above the crucial 3000 level, its 200-day moving average, and also its 61.8% Fibonacci peak-to-trough retracement. Many market analysts think the bottom of this bear market has already been reached, but some analysts see further strong falls likely in stocks over the coming weeks and months. There is a strong divergence of opinion, but we are seeing the bullish case strengthen dramatically that the recent market crash is over.
  • The price of spot Silver hit a 3-month high in USD terms, trading as high as $18.34 per ounce. The price looks likely to rise higher still over the coming week.
  • The Euro is close to reaching a new 3-month high against the USD, having advanced strongly in recent days, with the Euro acting as one of the strongest major currencies.
  • WTI Crude Oil has recovered from its slight sell-off on reports of Russian production costs, and is now trading above $35 per barrel.

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  • In Forex, riskier currencies are strong. The Australian Dollar and the Euro are the strongest major currency at present, while the U.S. Dollar is the weakest. The U.S. will release ISM Manufacturing PMI data later today.
  • Coronavirus deaths in Latin America and the Caribbean are now 40% of the global daily total, well exceeding those in both the U.S.A. (24%) and Europe (approx. 20%) which shows that the epicenter of the pandemic is now in South America. Brazil alone saw over 1,000 deaths and 30,000 new confirmed cases yesterday, again making the highest daily death toll of any country.
  • The U.S. saw its worst night of rioting and looting yet yesterday, as protests continue against police racism and brutality. President Trump has been calling for the national guard to reinforce the police in many locations, although local authorities have been mostly reluctant to do so.
  • Daily reported coronavirus deaths hit an all-time high over the weekend. Daily deaths globally peaked on April 18th and daily new confirmed cases peaked on 30th May. Total confirmed new cases stand at 6.15 million with an average case fatality rate of 6.05%. Both the total number of new cases and deaths continues to fall daily in the U.S.A. and almost everywhere in Europe outside Russia. Goldman Sachs forecast a 34% drop in U.S. Q2 annualized GDP and other analysts seeing a 30% unemployment rate in the near future. If correct, these will be the worst such numbers seen since the 1930s, but it should be noted many analysts continue to see a much better outlook for U.S. unemployment. The WTO has forecasted that global trade is set to fall by one third. The U.S. now sees an unemployment rate of 15% and a drop in 1st Q GDP of 5%. In recent weeks, more analysts have begun to forecast a faster economic recovery in the U.S. than had been expected.
  • The rate of new coronavirus infections appears to be increasing most quickly in Brazil, India, Mexico, Peru, Chile, and Iran. Russia’s “curve” of new cases seems to be flattening. Brazil now has the second highest number of confirmed cases of any country, followed by Russia and then the U.K. More restrictions are being loosened in Europe, and despite India’s strong growth in new cases, lockdown is being relaxed there also.

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