- European markets advance more than 1%.
- Metals rise modestly, the dollar falls.
- Wall Street futures in the green, ahead of more US data.
- The presentation of results for the second quarter of the big banks continues.
The main European stock markets advanced on Friday, as did Wall Street futures. At the same time, the dollar cuts part of the weekly gains. Treasury bond yields steady ahead of US economic data.
Rise in stocks before data
The S&P 500 closed down 0.30% on Thursday and heyou futures advance 0.29% on Friday. In minutes, the round of US economic data will begin with the June retail sales report. Then it will follow the one on industrial production and will culminate with the one on confidence and inflationary expectations of the consumer of the University of Michigan. Inflation data practically guarantees a 75 basis point hike by the Fed for the July meeting, and the debate for a 100 point hike is on the table.
With regard to corporate results, the presentations of large banks continue. Friday will be the turn of Citi Group, Wells Fargo, Blackrock and Bancorp. On Thursday JPMorgan and Morgan Stanley showed figures below those expected by analysts. Pinterest rises more than 15% in the premarket, after the WSJ reported that Elliot Management has amassed a 9% stake in the company.
The good tone in the equity markets occurs despite the fact that growth in China in the second quarter, according to official data, it was the lowest in more than two years, affected by the impact of policies to stop the advance of COVID. The economy grew 0.4% from a year earlier (below the 1.2% expected) after contracting 2.6% in the second quarter.
Political uncertainty grows in Italy. The Italian president rejected Mario Draghi’s resignation and could reach early elections, in case the former ECB president does not get parliamentary support by Wednesday.
In the United Kingdom follows the race for the succession of Boris Johnson. The five remaining candidates to be leaders of the Conservative Party will have the first televised debate.
Among currencies, the dollar is correcting lower in the first half of Friday and doing so moderately. EUR/SUD is moving away from the low since 2002, while USD/JPY is doing the same from the new high since 1998.
Relief comes at emerging market currencies on friday, after days under pressure. One case was that of Chilean peso which fell to record lows and forced the central bank to raise interest rates and present a plan to intervene in the market. USD/CLP rose from June’s low of 812 by 30% to a peak of 1,060 on Thursday.
The cryptocurrencies they are also favored by the improvement in the markets. The Bitcoin trades on $20,500, trying to return on $21,000. Gold and silver remain stable, validating significant weekly losses.
The prices of Petroleum rose in the last hour to two-day highs, paring weekly losses. Prices continue to be affected by the negative outlook for global growth. Reuters reported that the European Union could ban the import and transit of fuel from Russia six months before the planned date. US President Joe Biden will discuss energy supplies in Saudi Arabia today in Saudi Arabia.
Technical levels
Source: Fx Street
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