US equities wrapped up a cautiously optimistic week as the Dow Jones[1], S&P 500[2] and tech-heavy Nasdaq[3] Composite climbed. Most gains occurred in the latter as the former two have yet to surpass peaks set in June as they spend most of their time in consolidation. Anti-risk assets like the US Dollar[4] and to a certain extent the Japanese Yen[5] underperformed. The growth-linked NZD[6] gained.
Anti-fiat gold prices[7] continued the climb to new 2020 highs as yields on longer-dated Treasuries diminished[8]. This could be an early sign of fading confidence in the outlook for growth down the road. US coronavirus cases continued setting new highs this past week as certain states began seeing record upticks on Covid-19 fatalities.
Stock valuations in the world’s largest economy will start being tested as the second-quarter earnings season gets underway with major financial companies reporting in the week ahead. Further insight will also be revealed into how states and counties approach lockdowns should coronavirus cases and fatalities continue rising.
The Euro[9] and DAX 30[10] will be closely eyeing the ECB rate decision as well as a meeting between EU leaders to find common ground over a €750 billion rescue package to support economic growth amid Covid-19. The British Pound[11] and Australian Dollar[12] will be watching fresh updates on UK and China GDP data respectively. Will US retail sales continue inspiring confidence in growth?
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Fundamental Forecasts:
Euro Forecast: EUR/USD to Find Direction from ECB and EU Summit[14]
Two major events
