AlUla unveils new experiences and opens bookings    KSRelief launches medical campaigns to combat blindness in Sudan, Nigeria    Arab Parliament expresses concern over Yemen due to Houthi militia's violations    UK's Labour Party suspends former leader Jeremy Corbyn after anti-Semitism report    US and more Arab allies denounce Houthi attacks against Saudi Arabia    SFA unveils third edition of ‘Step Together' challenge to observe World Diabetes Day    UN strongly condemns knife attack in French city of Nice    India seeks global energy industry partnerships    "SAMA": Mortgages loans reached 208,505 Contracts until Q3 of 2020    At least 140 Dead After Migrant Vessel Sinks off Senegalese Coast    Japan's Total Coronavirus Cases Top 100,000    Kuwait Condemns Nice Attack as Brutal Terrorist Crime    Etihad Airways becomes first airline to issue sustainability-linked sukuk    Police of Makkah Region: Arrest of a citizen who attacked a security guard at the French Consulate in Jeddah using a sharp tool    Abeer Olayan Petroleum and gas expert    KSRelief launches a new voluntary medical campaign in Sudan    Rector of King Khalid University receives Swedish Ambassador    Saudi Press: Saudi Arabia allocates SR 500,000 for each family of health practitioners who died of COVID-19    Weather Forecast for Thursday    Bahrain's king receives US defense secretary, lauds strong bilateral ties    KSRelief delivers civil defense machinery to Palestinian govt    KAUST – the fancy city    Maisuria: Warmups, conditioning and rest key to successful return    14-year-old Dubai-based amateur secures invite to ODMC    26 countries pay musical tribute to coronavirus frontline heroes    A new era in architecture where future details design AlUla's past Nouvel describes UNESCO site as ‘The coming together of a landscape and history'    Saudi Stock Exchange Main Index Ends Trading, higher, at 8,198.9 Points    Qur'an recitation competition for children organized    Ministry of Commerce Highlights Saudi Arabia's Endeavors to Implement Guiding Principles Protecting Consumers, at UN Forum    Bahrain's top Islamic body condemns attempts to insult Muslim symbols    Saudi Stock Exchange Main Index Ends Trading Higher, at 8,155.31 Points    Bestselling global literary icons will lead cultural program at SIBF 2020    Plan to make vaccinations compulsory for birth certificate    MoH Marks World Osteoporosis Day 2020    Saudi man accused of harassing foreign wife asked to be produced before court Court allows divorce, custody of children by mother    Man United, Liverpool in talks to join new European super league    KSrelief, IMC, Sign Memorandum of Cooperation    Napoli blast four goals as they thumped Atlanta 4-1    VAR foils Liverpool in derby draw with Everton    MoH Calls on Groups of Patients to Postpone Umrah Performance    Ithra to Launch 3rd Creativity Season (Tanween)    Red Sea International Film Festival Announces a New Short Film Competition    S. P. Bala, legendary Indian singer, dead at 74    Happy National Day 90    Eid Al-Adha Prayer Performed at the Grand Holy Mosque    Pilgrims Perform Dhuhr and Asr Prayers in Arafat Holy Site    Senior Scholars Council Issues Decision No. 246 Regarding Attendance of Friday Prayer and Prayers at Mosques in a Case of Spread of Epidemic or Fear of its Spread    Custodian of the Two Holy Mosques Addresses Citizens and Muslims on Eid Al-Fitr    

Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.

Consolidation as Trump points at ‘complete decoupling' with China
Published in The Saudi Gazette on 19 - 06 - 2020

GENEVA — Asian stocks are set to close the week on a positive note, after having swung between hope of post-COVID recovery and fear of a second wave contamination this week. US equities were mostly flat on Thursday. Nasdaq led gains as investors felt more comfortable buying tech stocks, if they were to buy anything, amid record surge in new COVID-19 cases in some states in the US.
Meanwhile, Donald Trump said in a tweet Thursday that ‘the US certainly does maintain a policy option, under various conditions, of a complete decoupling from China.' His words didn't impact the market mood, though a complete decoupling between the US and China would significantly hit the US companies, already battered by the pandemic.
Also, Thursday's data was little satisfactory. The weekly jobless claims in the US rose 1.5 million last week hinting that business reopening didn't have a flourishing impact on jobs just yet.
In Australia, the retail sales jumped by a record 16.3% m-o-m in May as consumers rushed to stores following the easing of Covid-19 lockdown measures. The Aussie remained little changed against the greenback.
But from a technical perspective, we are about to see a formation of golden cross on the AUDUSD daily chart, where the 50-day moving average is about to cross above the 200-day moving average. The latter bullish formation could enhance tactical long positions in AUDUSD and encourage another move above the 0.70 mark.
A side note before we move forward. While the post-COVID jump in global retail sales should remain short-lived, the normalization in economic activity and rising oil prices will certainly have a significant inflationary effect across the world economy.
If the recovery doesn't follow the pace of the pickup in consumer prices, the central banks may find themselves stuck with ultra-unorthodox policies, a thin margin for more action, rising inflation and high employment.
In summary, the stagflation is the greatest risk of today's ultra-loose monetary policies and may hit the emerging markets heavier than the G10 economies.
The strong US dollar gains strength against most currencies, except the yen and the Swiss franc as de-risking continues. Gold remains stoic faced with the lack of clarity in market direction.
The black gold, however, gains traction on prospects of improved demand/supply dynamics despite the rising second wave worries and higher US inventories. A successful attempt on $40-offers should pave the way toward the next bullish target, $45.50, the 200-day moving average.
The Swiss National Bank (SNB) maintained status quo at Thursday's monetary policy meeting. The Bank of England (BoE) kept the interest rates unchanged and expanded the asset purchases program by 100 billion pound as expected. What was less expected is the BoE's hint to unwind its QE program at a significant pace over time.
The latter certainly wiped out the expectation of further expansion in BoE purchases and tempered the BoE doves in the wake of the announcement. The GBPUSD shortly retreated below the 1.24 mark.
Firmer US dollar and somewhat frayed BoE doves are weighing on sterling, but the downside should remain limited given that the real deadline in Brexit negotiations seem to have been postponed to October, although the British and EU negotiators have six weeks of intense negotiations ahead.
The barriers remain intractable, but there is hope that the pandemic will encourage Johnson to walk out the EU with a trade deal instead of empty hands by the end of this year.
Activity in FTSE futures (+0.19%) hint at a further consolidation near 6230p (the 100-day moving average) on the back of firmer energy prices and a softer sterling.
The EURUSD cleared the 1.12-support and rebounded from 1.1185 on the back of a stronger US dollar. The pair will likely extend weakness to 1.1160 Fibonacci support, which should distinguish between the past month's positive trend and a bearish reversal.
— The writer is senior analyst at Swissquote Bank

Clic here to read the story from its source.