Markets preview 30.6.2020

Sentiment remained positive during overnight trading hours, with equities rising slowly and commodity-linked currencies also seen stronger heading into EU hours.

During the Asian session, China’s official purchasing managers’ index showed factory activity in the world’s second-largest economy grew for a fourth straight month in June, offering hope that the global economic recovery is still on course despite the ongoing coronavirus crisis.

The manufacturing PMI improved to 54.4 in June, up from 53.6 in May. It really seems that the Chinese manufacturing sector posted a V-shape recovery since factories opened for business after the lockdowns. 

Equities turned lower as the EU session started, which is kind of a rule now, and indices were trading with losses during the London session, correcting yesterday’s gains. 

The US dollar was somewhat stronger, with the EURUSD pair holding above the 1.12 level, erasing all of yesterday’s gains, and the USDJPY pair was seen near 107.65, unchanged on the day. 

Later in the day, Jerome Powell is due to testify, along with Treasury Secretary Steven Mnuchin, before the House Financial Services Committee, in Washington DC. Their words could cause elevated volatility in the financial markets.