We are now past the middle of January, and this means that the largest US companies will report their earnings for the fourth quarter and many of them will provide the results of the entire 2020.
What will affect markets on July 3?
The overall market sentiment was mixed after the USA recorded the largest increase in virus cases since May 9. The data even offset the better-than-expected NFP.
- The US Covid-19 cases skyrocketed to 51 500 on Thursday. Those intimidating numbers are rising every day. The risk-off market tone prevails on the market.
- The US labor market showed greater development than analysts expected. Non-farm payrolls rose by 4.8 million, while the forecast was only - 3 million. It improved the market sentiment yesterday, but today the bullish rally lost steam as the USA is suffering from the record virus resurgence.
- Sino-American tensions continue worsening. The US officials claimed that they are “unhappy with China” and “there are going to be export restrictions.”.
- Australian retails sales came better than expected. They grew by 16.9%, while analysts anticipated the 16.3% increase.
EUR/USD dropped significantly after the better-than-expected NFP report yesterday. Nevertheless, today, the EUR may rise as US coronavirus cases are increasing, while Europe new infections are declining. If the pair rises to the 50-period moving average at 1.1250, it may surge further to the yesterday high at 1.1265. After that it may meet the next resistance already at 1.1300. Look for support levels at recent lows at 1.1230 and 1.1210.
S&P 500 is rallying despite record US infections. Now it’s heading towards the resistance at the June 19 at 3 200. If it crosses it, it may surge further to 3 225 and then to the all-time high at 3 3390. Support levels are at the 200-moving average at 3 025 and at the key psychological mark at 3 000.
The AUD gained on the positive retail data. It surged to the resistance at 0.695. The move above this level will push the price upward to the high of June 23 at 0.697. Support levels are 0.691 and 0.689.
Gold is stuck near the $1 775 level. The move above the 8-year high at $1 780 will encourage bulls to go long further on gold. Most analysts still highly expect the gold price to break through $1 800. The break below the low of June 24 at $1 760 may push prices to the next support at the 50-day moving average at $1 727.
- The European Final Services PMI will be released at 11:00 MT time and will add volatility to the EUR.
- Half an hour later the UK Final Services PMI will be reported. Stay tuned!
Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
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The Canadian central bank will make a monetary policy report and announce interest rates on Wednesday, January 20, at 17:00 MT time. Also, the BOC press conference will be held later.
USD’s rally takes a pause, while riskier assets are modestly rising.