Markets are expected to start the week risk-free, although there is still more room for maneuver in the benchmarks, with the S&P 500 approaching 61.8%. The DJIA has already reached its 61.8% retracement target. Meanwhile, for a quick summary of the news at the end and start of Friday’s weekend, see here: Forex Today: King Dollar continues to lead.
For the opening, the focus will be on the pound. It was under pressure on Friday, the worst performer in fact, undermined by the woes of Brexit. The UK and the EU both signaled an impasse in the talks, amid disagreement over the EU’s demand for a level playing field. Andrew Haldane, Governor of the Bank of England, said that “there are other options beyond that, or alongside that, which we are also looking into,” when he referred to interest rates. negative interest. He also discussed the use of quantitative easing, although he then clarified that it was not implied that policymakers are ready to use any of these options – Forex Today: King Dollar continues to lead.
We have more recent news and headlines from the weekend that will be digested by the markets, here and here. The headlines relate to the BoE considering negative rates and the Times reporting on the risks associated with the hard Brexit.
Deterioration of Chinese and American headlines
We are witnessing a war of words between the two most powerful economies in the world. Trade wars, COVID-19 backlash and now show muscle power on the nuclear front.
In more recent headlines on Monday, the South China Morning Post reports: “China responds to America’s ‘unreasonable crackdown’ on Huawei”:
After Washington announced new restrictions on the tech giant, Beijing said it would “firmly defend business and legitimate and legal rights and interests.” Observers say China is likely to retaliate, but exactly how remains to be seen.
Fed Powell will air for 60 minutes
After Powell’s speech: The economy will recover “regularly” until 2H 2020, we will learn more from the president of the Federal Reserve System, Jerome Powell, when he appeared on the American television program “60 minutes ” It will be broadcast starting at 7 p.m. ET (11 p.m. GMT).
Meanwhile, the Federal Reserve issued a blunt warning on Friday that “share and other asset prices could fall significantly if the coronavirus pandemic worsens, with the commercial real estate market among the most vulnerable sectors. hard hit, “reports Bloomberg News.
The Fed made this statement in its semi-annual report on financial stability, in which it warns of the risks for the United States. banking system and wider economy. The document highlighted the central bank’s rush to intervene in the markets and temporarily recall regulations on financial firms in response to the Covid-19 crisis.
“Asset prices remain vulnerable to significant price cuts if the pandemic were to take an unexpected turn, economic fallout would prove more unfavorable or tensions on the financial system would reappear,” the Fed said in the report. He cited commercial real estate as particularly vulnerable to lower valuations because “prices were high compared to basics before the pandemic” and there were serious disruptions in the hotel and retail sectors. detail.
The US CDC reports 31,967 new cases of coronavirus since yesterday; the total is now 1,467,065 cases compared to 1,435,098 in the previous report of May 16.
The US CDC reports 1,394 new deaths from the coronavirus yesterday; in total, 88,709 deaths compared to 87,315 in the previous report of May 16.
More soon …