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Europe markets updates on 05/06/2020

Euro hits 3-month high, on course for third week of gains, European shares gain, Gold falls, Oil rises as traders await opec+ meeting on extending supply cuts-june 5th,2020

Market Roundup

• German April Factory Orders (MoM)  -25.8%,-19.7% forecast, -15.6% previous

• Spanish April Industrial Production (YoY)  -33.6%,-12.2% previous

• UK May Halifax House Price Index (MoM)  -0.2%,-0.7% forecast, -0.6%  previous

• UK May Halifax House Price Index (YoY) 2.6%,2.7% previous

• Italian April Retail Sales (MoM)  -10.5%,-20.5% previous

• Italian April Retail Sales (YoY)  -26.3%, -18.4% previous

• Irish GDP (QoQ) (Q1) 1.2%,1.8% previous

• Irish GDP (YoY) (Q1) 4.6%,6.2% previous

Looking Ahead Economic Data

• 12:30 US May Private Nonfarm Payrolls  -7,500K forecast, -19,557K previous

• 12:30 US May Nonfarm Payrolls  -8,000K forecast,  -20,537K previous

• 12:30 US May Manufacturing Payrolls -440K forecast, -1,330K previous

• 12:30 US May Government Payrolls -980.0K previous

• 12:30 Canada May Full Employment Change -1,472.0K previous

•12:30 Canada May Part Time Employment Change -521.9K previous

• 12:30 US May Average Hourly Earnings (MoM)  1.0% forecast, 4.7% previous

• 12:30 US May Unemployment Rate  15.0% forecast, 13.0% previous

• 12:30 US May Participation Rate  59.8% previous

• 12:30 US May Average Weekly Hours  34.3 forecast, 34.2 previous

• 12:30 US May Unemployment Rate  19.7% forecast, 14.7% previous

• 12:30 US May Participation Rate  60.2% previous

• 12:30 US May Average Hourly Earnings (YoY) (YoY)  8.5% forecast, 7.9% previous

• 12:30 US May U6 Unemployment Rate 22.8% previous

• 12:30 US May Employment Change -500.0K forecast, -1,993.8K previous

• 13:00 Russia May CPI (MoM)  0.3% forecast, 0.8% previous

• 13:00 Russia May CPI CPI (YoY)  3.0%,3.1% previous

• 13:00 Brazil Auto Production (MoM) -99.0% previous

• 13:00 Brazil Auto Sales (MoM) -67.7% previous

• 14:00 Canada May Ivey PMI  22.8 previous

• 14:00 Canada May Ivey PMI n.s.a  23.6 previous

• 19:00 US April Consumer Credit   -20.00B forecast, -12.04B previous

Looking Ahead - Events, Other Releases (GMT)

• No significant events

Fxbeat

EUR/USD: The euro jumped to a three-month high on Friday after the European Central Bank expanded its stimulus more than expected to prop up an economy dealing with its worst recession since World War Two. The ECB’s move supported appetite for riskier currencies, lifting the Australian dollar to a five-month high and the British pound above peaks hit during the last two months. The central bank increased its emergency bond purchase scheme by a bigger-than-expected 600 billion euros to 1.35 trillion and extended the scheme to mid-2021.The euro rose 0.25% to $1.1367, its loftiest level in almost three months. On the week, the single currency has risen 2.4% and is set to clinch a third straight week of gains. Immediate resistance can be seen at 1.1381 (June 4th high), an upside break can trigger rise towards 1.1400 (Psychological level).On the downside, immediate support is seen at 1.1240  (5 DMA), a break below could take the pair towards 1.1172 (23.6% fib). Immediate resistance can be seen at 1.1381 (June 4th high), an upside break can trigger rise towards 1.1400 (Psychological level).On the downside, immediate support is seen at 1.1240  (5 DMA), a break below could take the pair towards 1.1172 (23.6% fib).

GBP/USD: Sterling rose to hit three-month high on Friday as sterling was boosted after Bank of England playing down the prospect of negative rates soon. The pound has gained 5% against the dollar since a low of $1.2075 in mid-May. The currency has recently been weighed down by the Britain’s high COVID-19 death toll, as well as Brexit-related risks, the prospect of negative interest rates and the country’s growing debt pile The pound hit a three-month high of $1.2690 at 0743 GMT, having strengthened during the overnight session. It has gained more than 3 cents since last Friday.Immediate resistance can be seen at 1.2728 (61.8% fib), an upside break can trigger rise towards 1.2800 (Psychological level).On the downside, immediate support is seen at 1.2578 (5 DMA), a break below could take the pair towards 1.2500 (Psychological level).

USD/CHF: The dollar edged lower against the Swiss franc on Friday as some traders  chose to take profits ahead of Friday’s nonfarm payrolls data. Investor attention is now focused on Friday’s U.S. employment report, which is expected to show nonfarm payrolls fell in May by 8 million jobs after a record 20.54 million plunge in April.The U.S. unemployment rate is forecast to rocket to 19.8%, a post-World War Two record, from 14.7% in April. Immediate resistance can be seen at 0.9596 (5 DMA), an upside break can trigger rise towards 0.9630 (38.2% fib).On the downside, immediate support is seen at 0.9545 (50% fib), a break below could take the pair towards 0.9458(61.8% fib ).

USD/JPY: The dollar was little changed against the Japanese yen on Friday as a recent rally fuelled by hopes of an economic rebound ran out of steam and investors locked in profits ahead of Non-farm payrolls data. Investors are pricing in a global economic recovery despite data showing the severe damage wrought by the coronavirus lockdowns. Later in the day, U.S. nonfarm payrolls figures are expected to show further deterioration in the country’s jobs market. The U.S. dollar was a tad higher against the Japanese yen at 109.32, having risen 1.4% so far this week. Strong resistance can be seen at 109.50 (23.6% fib), an upside break can trigger rise towards 110.00 (Psychological level).On the downside, immediate support is seen at 108.60(5 DMA), a break below could take the pair towards 107.80 (38.2 % fib).

Equities Recap

European stocks are back to being favourites as the absence of a major second wave of coronavirus infections has helped ramp up re-opening plans, a boost to the region’s economically sensitive cyclical sectors.

At (GMT 12:00 ),UK's benchmark FTSE 100 was last trading up at 1.74 percent, Germany's Dax was up by 1.76 percent, France’s CAC was last up by 1.94 percent.

Commodities Recap

Gold fell and was on track for a third straight weekly decline on Friday, weighed down by gains in riskier assets as investors grew more hopeful of a rebound in the coronavirus-hit global economy.

Spot gold was down 0.3% at $1,705.73 per ounce at 1140 GMT. U.S. gold futures fell 1.2% to $1,707.30.

Oil prices moved higher on Friday as traders await cues from a meeting that could take place as soon as this weekend where major oil producers will discuss whether to extend record production cuts.

Brent crude   futures were up 27 cents, or 0.7%, at $40.26 a barrel as of 0620 GMT, while U.S. West Texas Intermediate (WTI) crude   futures rose 17 cents, or 0.5%, to $37.58 a barrel.

Source: FXWire

U.S. jobs unexpectedly increase in May

    • May nonfarm payrolls: +2.5M vs. -8.00M consensus and -20.7M previous (revised from -20.5M)
    • Unemployment rate: 13.3% vs. 19.7% consensus and 14.7% previous.
    • Reflects a limited resumption of economic activity that had been hurt in March and April due to the coronavirus pandemic.
    • Labor force participation rate increased by 0.6 percentage point in May to 60.8%, following a decrease of 2.5 percentage points in April.
    • In May, employment rose sharply in leisure and hospitality,construction, education and health services, and retail trade.
    • Average hourly earnings for all employees on private nonfarm payrolls fell by 29 cents to $29.75 (that followed a gain of $1.35 in April); average hourly earnings of private-sector production and nonsupervisory employees decreased by 14 cents to $25.00.
    • Combined, revisions for March and April reflected 642K fewer jobs.

Wall Street Breakfast: May Jobs Report

Wall Street's first decline for the month of June came yesterday in a seesaw session that was highlighted by an unexpected rise in continuing jobless claims, ECB stimulus, economy reopenings and nationwide protests. The Nasdaq joined the S&P 500 in negative territory and the Dow recorded a nominal gain as FAANGs fell back and American Airlines (NASDAQ:AAL) posted its best day on record. S&P 500 futures rebounded nearly 1% overnight, ahead of today's nonfarm-payrolls report forecast to show more than 8M job losses in May and a surge in the unemployment rate to nearly 20%.

Rally goes on

If the job figures mentioned above are seen in today's data, it would mark a new post-WWII record and approach the worst levels since the Great Depression. Why is the market shrugging it off? While layoffs remained very high, they eased considerably in the second half of May as businesses reopened after locking down since mid-March to slow the spread of COVID-19. Manufacturing, services industries and consumer confidence levels are also stabilizing, adding to the hopeful signs of an economic recovery.

More stimulus

In a change of trends, European stocks are now outperforming their U.S. peers in the latest leg of the rebound, lifted by bets of a quick recovery and enormous stimulus plans. The ECB on Thursday approved a stimulus package that surpassed expectations, nearly doubling the size of its Pandemic Emergency Purchase Plan to €1.35T and extending the program to at least June 2021. We'll see what the U.S. has planned next week, when the Fed gathers for its June policy meeting.

New trades

The initial public offering market reopened with a bang this week as Warner Music (NASDAQ:WMG) returned to the public markets after nine years of being private. Others in the U.S. jumped on the bandwagon, including ZoomInfo (ZI) and Shift4 Payments (FOUR), while NetEase (NASDAQ:NTES) and JD.com progressed toward listings in Hong Kong as Chinese companies seek secondary listings closer to home amid a U.S. crackdown (see below). Slipping under the radar yesterday was electric heavy-truck maker Nikola (NASDAQ:NKLA) going public after its merger with VectoIQ was approved by shareholders.

Investment tensions

Nasdaq's (NASDAQ:NDAQ) recent decision to tighten listing rules to combat fraudulent accounting practices at China-based companies "should serve as a model for other exchanges in the U.S., and around the world," according to Secretary of State Mike Pompeo. "I applaud Nasdaq for requiring auditing firms to ensure all listed companies comply with international reporting and inspection standards." The statement is the latest flashpoint in U.S.-China relations at a time of friction between the world's two largest economies over trade, the coronavirus pandemic and Hong Kong.

Breakthrough for OPEC+

The cartel and its allies are set to extend production cuts through the end of July and could meet this weekend to sign off on the deal, Bloomberg reports. After almost a week of talks, Russia and Saudi Arabia clinched a tentative agreement with holdout member Iraq, which made less than half of its assigned cutbacks last month. Details are still not clear, but a failure to reach an understanding could have brought millions of barrels of oil back on the market.

2 billion doses

AstraZeneca (NYSE:AZN) is aiming to produce 2B doses of a coronavirus vaccine, including 400M for the U.S. and U.K. and 1B for those in low- and middle-income countries. Distribution would likely start in September or October, with the balance of deliveries likely to be made by early 2021. It is not known whether the vaccine, named AZD1222, will prove safe and effective in clinical trials, but "we believe the probability of success is high enough that we are willing to support the manufacturing at-risk," Dr. Richard Hatchett, who is involved with the project, said in a statement.

Chips in play

Casino stocks rose yesterday as gamblers flocked to downtown Las Vegas for reopening parties. Temperature checks, socially distanced slot players and face masks at blackjack tables are now common, and the Nevada Gaming Control Board required casinos to limit gambling floors to 50% occupancy. Buffets, nightclubs, big shows and live entertainment venues will stay shuttered for the time being.

Musk vs. Bezos

In a reply on Twitter, Tesla (NASDAQ:TSLA) CEO Elon Musk called for Amazon (NASDAQ:AMZN) to be broken up, noting "monopolies are wrong!" The comment came days after the entrepreneur said he was "off Twitter for a while" and was in response to an email image of Amazon's restriction on a book that discussed the COVID-19 pandemic. CNBC in a segment highlighted the animosity that may potentially exist between Elon and Jeff Bezos, not to mention their competing interests in space, with the latter's Blue Origin also building spacecraft. Amazon is also invested in Rivian, an electric vehicle manufacturer.

Flagging state-controlled media

Facebook (NASDAQ:FB) has begun labeling state-controlled media organizations like Russia's Sputnik, Iran's Press TV and China's Xinhua News to alert users whether content may be under the influence of a state. "State-controlled media outlets rarely advertise in the U.S.," the company wrote in a blog post. "Nevertheless, later this summer we will begin blocking ads from these outlets in the U.S. out of an abundance of caution ahead of the November 2020 election." Facebook will not label any U.S.-based news organizations, as it determined that even U.S. government-run outlets have editorial independence.

What else is happening...

Slack (NYSE:WORK) sets partnership with Amazon Web Services (AMZN).

Novavax (NASDAQ:NVAX) scores defense funding for COVID-19 vaccine.

J.C. Penney (OTCPK:JCPNQ) to close 154 stores in first post-bankruptcy phase.

NBA to vote on 22-team short-season return.

GM Cruise is trying to poach Zoox (ZOOX) engineers - Reuters.

 

Thursday's Key Earnings

Broadcom (NASDAQ:AVGO-1.1% AH following in-line fiscal Q2.

DocuSign (NASDAQ:DOCU+5.5% AH posting strong quarter during pandemic.

Gap (NYSE:GPS-6.7% AH with comp sales down 61%.

J.M. Smucker (NYSE:SJM-4.8% giving back strong gains.

Slack Technologies (WORK+5.4% AH seeking partnership with AWS.

Today's Markets

In Asia, Japan +0.7%. Hong Kong +1.7%. China +0.4%. India +0.8%.

In Europe, at midday, London +1.1%. Paris +1.9%. Frankfurt +1.5%.

Futures at 6:20, Dow +1.2%. S&P +0.9%. Nasdaq +0.4%. Crude +1.8% to $38.07. Gold -0.8% to $1713.50. Bitcoin +2.8% to $9820.

Ten-year Treasury Yield +3 bps to 0.85%

Today's Economic Calendar

8:30 Non-farm payrolls

1:00 PM Baker-Hughes Rig Count

3:00 PM Consumer Credit

First Thing: a message to white America: ‘Get your knee off our necks’

Al Sharpton delivered a powerful eulogy at George Floyd’s memorial as peaceful protests went on. Plus, the Trump-loving cop blocking reform in Minneapolis

Good morning,

Curfews were lifted from Los Angeles to Washington DC on Thursday as peaceful protests against police violence continued for another day in the wake of the killing of George Floyd by officers in Minneapolis.

Floyd’s family led the mourners at a memorial service in the Minnesota city – the first of three such events planned across the country – where the Rev Al Sharpton gave voice to the passion, anger and hope of the protesters in a moving eulogy:

What happened to Floyd happens every day in this country in education and health services and in every area of American life. It’s time for us to stand up in George’s name and say get your knee off our necks.

The police response to protests over brutality? More brutality

Amid the widespread unrest over Floyd’s death, several fresh incidents of police violence stand out. Two police officers in Buffalo, New York, have been suspended following the emergence of a video in which they shoved a 75-year-old man to the ground. In Vallejo, California, police shot dead an unarmed 22-year-old who was on his knees with his hands up. In Austin, Texas, a black college student is in critical condition after suffering brain damage from a police beanbag round during a protest.

Rather than reform policing in America, we ought to defund it and use public spending in more publicly responsible ways, says the laywer and activist Malaika Jabali, arguing that police were never really created to protect and serve the masses:

Policing in America cannot be reformed because it is designed for violence. The oppression is a feature, not a bug.

The ACLU is suing Trump for teargassing White House protesters

The ACLU and other civil rights groups are suing Donald Trump, his attorney general, William Barr, and other federal officials over the law enforcement assault on peaceful protesters in Washington DC on Monday, when police deployed teargas and fired rubber bullets to clear the crowd so the president could walk across the street from the White House to get a photo op at a nearby church.

  • Barr claims to have evidence of Antifa involvement in “hijacking” peaceful protests over Floyd’s death to incite violence, saying the amorphous leftwing group was among a “witches brew a lot of different extremist organisations trying to exploit the protests.”

Why racism makes black Americans more likely to catch Covid-19

The numbers are stark: black Americans are by some measures three times as likely to catch and be killed by the coronavirus as whites. On Thursday, witnesses told a House subcommittee on the crisis that structural racism is to blame for leaving African American and other minority populations with inferior health, housing and economic conditions in the face of the pandemic.

Meanwhile, the New York governor, Andrew Cuomo, expressed concern that the mass demonstrations over Floyd’s death could spread infections. We asked experts to weigh in on whether it was safe to protest in a pandemic.

More coronavirus updates:

In other news…

  • A Confederate statue will be removed from downtown Richmond, Virginia. Black leaders have praised the state’s decision to take down the towering tribute to General Robert E Lee that stands on the city’s Monument Avenue.
  • The Lancet has retracted the hydroxychloroquine paper that led to trials of the anti-malarial drug as a Covid-19 treatment being halted. Following an investigation by the Guardian, the study’s lead author said he could no longer vouch for the accuracy of the data used in the research.
  • Ukrainian prosecutors found no evidence of wrongdoing by Hunter Biden in an audit that examined ties between the son of Trump’s presidential rival and the energy company Burisma, of which he was a board member from 2014 to 2019.
  • The New York Times has issued a mea culpa over its widely criticised publication of an op-ed by the Republican senator Tom Cotton, in which he urged President Trump to “send in the troops” to quell protests.

Asia markets updates on 05/06/2020

Euro at 2-1/2 month peak as ECB expands stimulus, greenback plunges ahead of U.S. nonfarm payroll report, Asian shares surge - friday. June 5th, 2020

Market Roundup

  • Oil edges higher as traders eye producer talks
  • Gold eases for third straight week

Economic Data Ahead

  • (0330 ET/0730 GMT) UK Halifax House Prices (YoY/3m)(May)
  • (0330 ET/0730 GMT) UK Halifax House Prices (MoM)(May)
  • (0400 ET/0800 GMT) EZ Retail Sales s.a. (MoM)(Apr)
  • (0400 ET/0800 GMT) EZ Retail Sales n.s.a (YoY)(Apr)

Key Events Ahead

  • No Significant Events Scheduled

FX Beat

DXY: The dollar index plunged to multi-month lows as investors awaited U.S. employment data due later in the day, which is expected to show nonfarm payrolls fell by 8 million in May after a record 20.537 million plunge in April, while the unemployment rate is forecast to soar to 19.8 percent, a post-World War II record, from 14.7 percent in April. The greenback against a basket of currencies traded 0.2 percent down at 96.53, having touched a low of 96.49 earlier, its lowest since March 12.

EUR/USD: The euro rallied, extending gains for the 10th straight session after the European Central Bank expanded its stimulus more than expected to prop up an economy dealing with its worst recession since World War II. The ECB increased its emergency bond purchase scheme by 600 billion euros to 1.35 trillion and extended the scheme to mid-2021. The European currency traded 0.1 percent up at 1.1345, having touched a high of 1.1362 on Thursday, its highest since March 11. Investors’ attention will remain on a series of data from Eurozone economies, ahead of the U.S. nonfarm payroll, unemployment rate, labour force participation, average hourly earnings and consumer credit change. Immediate resistance is located at 1.1396, a break above targets 1.1420. On the downside, support is seen at 1.1311, a break below could drag it below 1.1274.

USD/JPY: The dollar surged to a near 2-month peak amid optimism in financial markets as easing social distancing restrictions supported economic recovery hopes. The U.S. weekly jobless claims report showed the number of Americans filing for benefits declined below 2 million last week for the first time since mid-March. The major was trading 0.1 percent up at 109.21, having hit a high of 109.23 earlier, its highest since April 7. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. nonfarm payroll, unemployment rate, labour force participation, average hourly earnings and consumer credit change. Immediate resistance is located at 109.50, a break above targets 109.70. On the downside, support is seen at 108.70, a break below could take it near at 108.40 (5-DMA).

GBP/USD: Sterling advanced to an over 1-month high as some market participants speculate that the December transition deadline might get extended because of the new coronavirus pandemic, which slowed down Brexit negotiations. On Wednesday, Prime Minister Boris Johnson’s spokesman urged companies to prepare for Britain’s exit from the EU single market and customs union at the end of the year regardless of the outcome of talks. The major traded 0.3 percent up at 1.2639, having hit a high of 1.2639 on Thursday, it’s highest since April 30. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2673, a break above could take it near 1.2706. On the downside, support is seen at 1.2510 (5-DMA), a break below targets 1.2478. Against the euro, the pound was trading 0.2 percent up at 89.46 pence, having hit a low of 90.54 last week, it’s lowest since March 27.

AUD/USD: The Australian dollar jumped to a fresh 5-month high after analysts again upgraded their outlook for the Aussie in the latest Reuters poll. Median forecasts for the Australian dollar were raised by around a cent to $0.6400 in one month, $0.6450 in three and $0.6800 on a one-year horizon. The Aussie trades 0.7 percent up at 0.6989, having hit a high of 0.7004 earlier, it’s highest since Jan 2. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7031, a break above could take it near 0.7082. On the downside, support is seen at 0.6909, a break below targets 0.6844 (5-DMA).

Equities Recap

Asian shares erased early losses and were poised for their biggest weekly rise since 2011, bolstered by powerful central bank stimulus.

MSCI's broadest index of Asia-Pacific shares outside Japan surged 0.1 percent.

Tokyo's Nikkei rallied 0.6 percent to 22,835.50 points, Australia's S&P/ASX 200 index surged 0.1 percent to 5,998.70 points. South Korea's KOSPI jumped 1.5 percent to 2,182.27 points.

Shanghai composite index rose 0.2 percent to 2,925.92 points, while CSI 300 index traded 0.3 percent up at 3,993.73 points.

Hong Kong’s Hang Seng traded 0.9 percent higher at 24,579.91 points. Taiwan shares added 0.7 percent to 11,479.40 points.

Commodities Recap

Crude oil prices surged as traders await cues from a meeting that could take place as soon as this weekend where major oil producers will discuss whether to extend record production cuts. International benchmark Brent crude was trading 0.4 percent higher at $40.10 per barrel by 0504 GMT, having hit a high of $40.51 on Wednesday, its highest since March 9. U.S. West Texas Intermediate was trading 0.3 percent up at $37.39 a barrel, after rising as high as $38.15 on Wednesday, its highest since March 9.

Gold prices eased and was on track for a third straight weekly decline ahead of a highly awaited U.S. jobs report later in the day as markets pinned hopes on an economic recovery. Spot gold was trading 0.3 percent down at $1,710.08 per ounce by 0514 GMT, having touched a low of $1,689.58 on Wednesday, its lowest since May 7 and has declined about 0.8 percent so far this week, which could be its biggest fall since the week ending May 1. U.S. gold futures slid 0.7 percent to $1,714.50.

Treasuries Recap

On Thursday, the benchmark 10-year yield was up 5.7 basis points at 0.8184 percent, having touched as high as 0.822 percent, the most since March 27. The two-year U.S. Treasury yield was down less than a basis point at 0.196 percent.

Source: FXWire

Friday briefing: Tracing system ‘imperfect’ until autumn

Top story: Masks compulsory on public transport from 15 June

Morning everyone. I’m Martin Farrer and these are the top stories this morning.

Britain’s test-and-trace system could take another four months before it is working properly, the Guardian has learned, raising concerns about how the country might cope with a second wave of coronavirus infections. Tony Prestedge, a banker drafted in to run the NHS scheme, told staff that the programme would be “imperfect” at launch and won’t be world class until September or October. Boris Johnson had said the “world-beating” scheme would be in place by 1 June. Official figures showed that there were 83% more deaths from dementia than usual in April as charities warned that reduced care and family visits during the crisis meant that sufferers were “just switching off”. A hospital doctor has resigned over Dominic Cummings refusal to quit as Johnson’s senior adviser over his lockdown car trip to Durham.

As the nation edges out of lockdown, face masks will be compulsory on all public transport in England from 15 June, which is the same day non-essential shops are likely to reopen. Passengers will also be able to receive alerts about congestion on trains and stations so that they can delay their journeys if possible. You can follow all the last coronavirus developments at our live blog or at a glance.

‘Get off our necks’ – The streets of American cities may have become calmer but the battleground over the death of George Floyd looks set to move to the courts after civil rights groups said they would sue Donald Trump over the use of teargas to clear protesters for his Washington church photo op. The veteran black pastor Rev Al Sharpton delivered a powerful address at a memorial for Floyd in Minneapolis, saying he was killed by a “pandemic of racism” and warning white America to “get off our necks”. Floyd’s family wept as people raised their arms in the air and a singer broke into Amazing Grace. The New York Times says an opinion piece by Republican senator Tom Cotton which advocated for the deployment of the military against protesters “did not meet editorial standards”.

In Washington state, the death of a black man in police custody in March has been ruled as murder, while in California police responding to reports of alleged looting shot dead a man who was on his knees with his hands in the air. Follow all the developments in the US protests story at our live blog here.


McCann hope – Police in Britain, Germany and Portugal have issued appeals for information about the strongest suspect ever identified in the disappearance of Madeleine McCann in 2007. Circumstantial evidence has convinced detectives that a 43-year-old German child sex offender and rapist is their prime suspect. He has been known to police for years, and was convicted in Germany last year of the rape of a 72-year-old American woman in Praia da Luz, Portugal, in 2005, two years before Madeleine was snatched from a hotel room the same area. He is also known to have committed hotel break-ins. The breakthrough brings hope to Madeleine’s parents in their 13-year quest to find out what happened to their daughter.


Given out – Geoffrey Boycott has been dropped from the commentary team for Test Match Special in what appears to signal the end of the controversial former England opener’s career at the BBC. Boycott, who was discarded by the BBC after assaulting his girlfriend in 1998 before being reinstated in 2005, has been left out of the TMS team for 2020 in a year which will see the corporation screen Test highlights fronted by England women’s player Isa Guha.

Maritime heritage – The wreck of a German warship that sank off the coast of Kent in 1878 has been given heritage protection. The SMS Grosser Kurfürst sank “within minutes” with the loss of 284 men after it collided with another ironclad German ship while on a training exercise. The decision means the wreck, which is upside down on the sea bed, can be visited by divers but its contents will be protected.

Coronavirus extra

The outbreak in Brazil continues to worsen with another 1,300 deaths recorded yesterday. The country now has the third highest death toll behind the US and the UK, while cases in South Africa almost doubled on Thursday. The worldwide total is now nearly 390,000 with 6.6 million cases and the pandemic has prompted a leading economist and the UN’s environment chief to warn that it is an “SOS” signal for the human race. Astra Zeneca says it has doubled its capacity for producing a possible vaccine to 2bn doses and an Australian government taskforce has endorsed the anti-Ebola drug remdesivir for treatment against Covid-19. New Zealand could declare itself virus-free as early as next week after 14 days in a row without registering any new cases.

George Floyd protests: civil rights groups sue Trump and Barr for use of teargas outside White House – live

A summary of the past few hours:

  • A memorial service for George Floyd was held in Minneapolis. Family members spoke and civil rights campaigner Rev Al Sharpton also addressed the service. He promised a new march on Washington on 28 August, 57 years since Martin Luther King Jr led his march to the capital, to seek policing reform.
  • Three former Minneapolis officers charged with aiding and abetting the murder of Floyd appeared in court. Bail was set at $1m, down to $750,000 if certain conditions are met.
  • Former White House chief of staff John Kelly and former commander in Afghanistan and against Isis John Allen joined the ranks of senior military figures splitting from Donald Trump over his threats to use troops against protesters and the assault on peaceful protesters in Washington on Monday. Combat units moved close to Washington were reported to being sent back to base.
  • The ACLU has sued Donald Trump, William Barr and other administration officials, on behalf of Black Lives Matter and individual protesters, over the attack on peaceful protesters which was dealt out so Trump could walk to St John’s church for a photo op.
  • Attorney general William Barr claimed to have evidence of “Antifa” complicity in violent events around protests in the past week.
  • Virginia governor Ralph Northam confirmed that the state will move as swiftly as possible to remove a huge statue of Confederate general Robert E Lee from Monument Avenue in Richmond.

Protests are continuing around the country – Ankita Rao, for example, has been with protesters in New York City – so stay with us.

ACLU and Black Lives Matter sue Trump and Barr

US markets updates on 05/06/2020

Dollar slides as risk appetite grows, US stocks ends mixed, Gold gains 1%, Oil prices steady as market awaits clarity on opec+ output cuts-june 5th,2020

Market Roundup

• ECB beefs up its bond-buying programme

• U.S. weekly jobless claims drop below 2 million

• Markets awaiting U.S. payrolls report on Friday

• US Imports 232.20B previous  200.69B, 232.20B  previous

• US Exports 151.28B,  187.80B previous

•  US Continuing Jobless Claims 21,487K,20,050K forecast, 21,052K previous

• US Jobless Claims 4-Week Avg 2,284.00K,2,608.00K previous

•  US Initial Jobless Claims1,877K,1,800K, 2,123K previous

• Canada April Exports 32.66B,42.07B forecast, 46.26B previous

•  US Nonfarm Productivity (QoQ) (Q1) -0.9%,-2.7% forecast,1.2% previous

• US Unit Labor Costs (QoQ) (Q1) 5.1%, 5.0% forecast, 0.9% previous

• Canada April Imports 35.91B, 41.37B forecast, 47.67B previous

• US April Trade Balance -49.40B, -49.00B forecast, -44.40B previous

Looking Ahead Economic Data

• 22:30 Australia May AIG Services Index  27.1 previous

• 23:30 Japan April Household Spending (YoY)  -15.4% forecast, -6.0% previous

• 23:30 Japan April Household Spending (MoM)  -8.7% forecast, -4.0% previous

• 23:50 Japan May Foreign Reserves (USD) 1,368.6B previous

• 05:00 Japan April Coincident Indicator (MoM)  -5.2% previous

• 05:00 Japan April Leading Index (MoM)  -7.2% previous

• 05:00 Japan Leading Index 84.7 forecast, 83.8 previous

Looking Ahead - Events, Other Releases (GMT)

• No significant events

Currency summaries

EUR/USD: The euro jumped to a 12-week high against the U.S. dollar on Thursday after the European Central Bank increased stimulus to shore up economies hurt by the coronavirus pandemic. The ECB increased the size of its Pandemic Emergency Purchase Program (PEPP) to 1.35 trillion euros ($1.52 trillion) from 750 billion euros, more than the 500 billion-euro increase most analysts had expected, and extended it until June 2021 at the earliest, with a pledge to reinvest proceeds until at least the end of 2022.Immediate resistance can be seen at 1.1363 (Daily high), an upside break can trigger rise towards 1.1400 (Psychological level).On the downside, immediate support is seen at 1.1187 (5 DMA), a break below could take the pair towards 1.1113 (9 DMA).

GBP/USD: Sterling fell on Thursday as Britain and the European Union (EU) continued their Brexit negotiations, before the late June deadline by which the United Kingdom needs to say whether it wants an extension of the transition period. The pound had gained after British officials said the United Kingdom might be able to reach a compromise on fisheries with the EU earlier this week. An improvement in risk sentiment had also helped the pound, pushing it up more than 3% in one week. But a strengthening dollar and worries that Britain will exit the EU without a trade deal at the end of the year weighed on the British currency .Immediate resistance can be seen at 1.2656 (Higher BB), an upside break can trigger rise towards 1.2700 (Psychological level).On the downside, immediate support is seen at 1.2504 (Daily low), a break below could take the pair towards 1.2409 (5 DMA).

USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Thursday, pulling back from an earlier near three-month high, as oil prices fell and domestic data showed a greater-than-expected plunge in exports due to the coronavirus crisis. Canada posted a trade deficit of C$3.25 billion in April as exports fell by nearly 30% to the lowest level in more than 10 years at C$32.7 billion. Analysts had forecast exports would be C$42.1 billion. The Canadian dollar was trading 0.2% lower at 1.3522 to the greenback. The currency touched its strongest intraday level since March 9 at 1.3468.Immediate resistance can be seen at 1.3532 (June 3rd high), an upside break can trigger rise towards 1.3608(23.6%fib).On the downside, immediate support is seen at 1.4026 (5 DMA), a break below could take the pair towards 1.3996 (55 DMA).

USD/JPY: The dollar strengthened against the Japanese yen on Thursday  as global markets grew more optimistic about an economic recovery boosting dollar against Japanese yen. The U.S. currency had began strengthening in overnight trading, pushing the Japanese yen to a two-month low of 109.150. A reminder of the economic travails will come on Friday with the Labor Department’s jobs report, which is expected to show the U.S. unemployment rate sky-rocketing to a historic 19.7%. Strong resistance can be seen at 109.51 (23.6% fib), an upside break can trigger rise towards 110.00 (Psychological level).On the downside, immediate support is seen at 108.67 (5 DMA), a break below could take the pair towards 108.25 (9 DMA).

Equities Recap

A strong rally this week in European stocks stalled on Thursday as investors locked in profits, although euro zone banks surged after the European Central Bank ramped up its stimulus programme to prop up the coronavirus-hit economy.

UK's benchmark FTSE 100 closed down by  0.64 percent, Germany's Dax ended down by 0.45 percent, France’s CAC finished the day down by 0.21 percent.

The Nasdaq 100 index retreated from an intraday record high on Thursday, with the S&P 500 and Dow Jones indexes also slipping as a rally fueled by hopes of a post-coronavirus economic recovery fizzled out.

Dow Jones closed up  by  0.05 percent, S&P 500 closed down by 0.34 percent, Nasdaq settled down  by 0.69% percent.

Treasuries Recap

Longer-term U.S. Treasury yields jumped on Thursday to levels not seen in months as European stimulus efforts and a slightly less grim U.S. jobs report helped support investor confidence.

The benchmark 10-year yield was up 5.7 basis points in afternoon trading at 0.8184%. It touched as high as 0.822%, the most since March 27.

Commodities Recap

Gold rose more than 1% on Thursday as the dollar retreated and Wall Street paused its recent rally as dismal U.S. trade data overshadowed slightly upbeat labor market numbers and optimism about an economic rebound.

Spot gold was up 1.1% to $1,716.60 per ounce at 12:38 p.m. EDT (1638 GMT). U.S. gold futures rose 1.1% to $1,723.20.

Oil prices were little changed in choppy trade on Thursday as investors awaited a decision from top crude producers on whether to extend record output cuts.

Brent crude futures  ended the session 20 cents, or 0.5% higher, at $39.99 a barrel after a volatile session. U.S. West Texas Intermediate (WTI) crude   futures rose 12 cents to $37.41.

Source: FXWire

Morning mail: Lancet retracts Covid-19 paper, Floyd memorial, walking with wombats

Top stories

The leading medical journal the Lancet has retracted a paper responsible for halting global trials of hydroxychloroquine in relation to Covid-19, with its editor, Richard Horton, describing the data behind the research, provided by a little-known US company, Surgisphere, as “a shocking example of research misconduct”. Control trials established by the World Health Organization and several countries around the world had been suspended on the basis of the paper’s findings but an investigation by Guardian Australia’s Melissa Davey has exposed how experts around the globe had doubts about the accuracy of the data provided by Surgisphere.

The family of George Floyd and invitees including the Rev Jesse Jackson have conducted a memorial service in Minneapolis, the first of three planned across the US. The civil rights activist Rev Al Sharpton delivered the eulogy, calling for greater rights and protections for all Americans in dealing with the police. Meanwhile, a movement to reduce law enforcement budgets across the US has attracted “unprecedented” support, including from legislators, with advocates saying reinvesting the money in services would be a powerful way to reverse police brutality and killings. In Georgia, a state investigator has alleged in court that the white shooter of the black jogger Ahmaud Arbery was heard using a racial slur shortly after mortally wounding the unarmed 25-year-old.

Brazil has overtaken Italy’s Covid-19 tally to register the third-highest officially recorded toll globallyafter a record 1,349 deaths took its number to 32,500. Mexico also reported a record daily tally of more than 1,000 deaths, with experts suggesting worse could yet be to come across Latin America in coming months. The director of Brazil’s Institute for Health Policy Studies expressed his extreme worry that exiting lockdown has proceeded too prematurely, warning: “[We] are going to witness hospitals collapsing in almost every state.” In Iran, the government has confirmed a record daily rate of new infections – even higher than the first wave experienced in March. In the UK, the transport secretary has announced that face coverings will be mandatory on public transport from 15 June.

Australia

A $9.3m government scheme to deliver emergency food supplies to older Australians isolating during Covid-19 delivered just 38 of a predicted 36,000 food boxes, the Department of Health has confirmed. The opposition’s aged care spokeswoman, Julie Collins, said Australians over 70 had been “left to slip through the cracks”. A rival $50m Meals on Wheels program has been blamed for “low demand”.

Commissioners handpicked by Scott Morrison for the National Covid-19 Coordination Commission are attracting scrutiny over potential conflicts of interestwith the prime minister’s department refusing to release “in confidence” disclosures from members including the chair and former Fortescue Metals boss, Nev Power.

A new national security test will be added to Australia’s foreign investment regime, allowing the federal treasurer to vet any significant investments in businesses that have national security ramifications. Previously, purchases up to nearly $1.2bn could take place without screening.

The world

German public prosecutors investigating a new lead suspect in the Madeleine McCann abduction case believe the British girl is deadMadeleine disappeared in Portugal in 2007, aged three, but police are still appealing to members of the public to come forward with information pertaining to the suspect.

A 14-month siege of Libya’s capital Tripoli by the renegade general Khalifa Haftar has been lifted after Turkish-backed troops aligned with the UN-recognised government forced the rebels to retreat to strongholds in the country’s south and east.

More than 300 animals and plants endemic to Canada are facing the threat of extinction, with only 10% considered “globally secure” or “apparently secure”, according to a major new study that was two years in the making.

More than a century after it was torn down by a revolutionary mob, a replica of a historic 17th century statue of the Virgin Mary has been restored to its original place in Prague. The baroque figurine, erected in 1652, had been seen as a symbol of Hapsburg oppression during the collapse of the Austro-Hungarian empire.

Europe markets updates on 04/06/2020

Euro falls ahead of ECB meeting, European shares inch lower, Gold gains, Oil drops on U.S. inventories and doubts over output cuts-june 3rd, 2020

Market Roundup

• Swiss May CPI (YoY)  -1.3%,-1.3% forecast, -1.1% previous

• Swiss  May CPI (MoM)  0.0%,0.1% forecast, -0.4% previous

• EU May  IHS Markit Construction PMI  40.1, 31.9 previous

• UK May Construction PMI  28.9, 29.7 forecast, 8.2 previous

• UK May Car Registration (MoM) 368.6%,-98.3% previous

• UK May Car Registration (YoY)  -89.0%,-97.3% previous

• EU April Retail Sales (YoY)  -19.6%,-22.3% forecast, -9.2% previous

• EU April Retail Sales (MoM)  -11.7%,-15.0% forecast, -11.2% previous

• EU June ECB Interest Rate Decision  0.00%,0.00% forecast, 0.00%  previous

Looking Ahead Economic Data

• 12:30 US Imports 232.20B previous 232.20B  previous

• 12:30 US Exports 187.80B previous

• 12:30 US Continuing Jobless Claims 20,050K forecast, 21,052K previous

• 12:30 US Jobless Claims 4-Week Avg 2,608.00K previous

• 12:30 US Initial Jobless Claims 1,800K, 2,123K previous

• 12:30 Canada April Exports 42.07B forecast, 46.26B previous

• 12:30 US   Nonfarm Productivity (QoQ) (Q1) -2.7% forecast,1.2% previous

• 12:30 US Unit Labor Costs (QoQ) (Q1) 5.0% forecast, 0.9% previous

• 12:30 Canada April Imports  41.37B forecast, 47.67B previous

• 12:30 US April Trade Balance  -49.00B forecast, -44.40B previous

• 13:00 Brazil Auto Production (MoM) -99.0% previous

• 13:00 Brazil Auto Sales (MoM) -67.7% previous

Looking Ahead - Events, Other Releases (GMT)

• 12:30 ECB Press Conference

• 18:00 Canada BoC Deputy Governor Gravelle Speaks

Fxbeat

EUR/USD: The euro declined against dollar on Thursday ahead of a European Central Bank meeting at which policymakers could step up stimulus measures.ECB is expected to increase the size of its 750 billion euro ($840 billion) Pandemic Emergency Purchase Programme to support Europe’s weakest economies  although some investors think this will happen at July’s meeting rather than today. The euro was at $1.2025 at 0720 GMT, down 0.3% and retreating from three-month highs. It has been supported recently by proposals for a 750 billion euro EU-wide recovery fund, made up of grants and loans, to share the cost of the coronavirus on hard-hit countries such as Italy and Spain. Immediate resistance can be seen at 1.1253 (June 3rd high), an upside break can trigger rise towards 1.1300 (Psychological level).On the downside, immediate support is seen at 1.1168 (61.8 % fib), a break below could take the pair towards 1.1134 (5 DMA).

GBP/USD: Sterling fell on Thursday as Britain and the European Union (EU) continued their Brexit negotiations, before the late June deadline by which the United Kingdom needs to say whether it wants an extension of the transition period. The pound had gained after British officials said the United Kingdom might be able to reach a compromise on fisheries with the EU earlier this week. An improvement in risk sentiment had also helped the pound, pushing it up more than 3% in one week. But a strengthening dollar and worries that Britain will exit the EU without a trade deal at the end of the year weighed on the British currency .Immediate resistance can be seen at 1.2616 (Higher BB), an upside break can trigger rise towards 1.2663 (200 DMA).On the downside, immediate support is seen at 1.2538 (61.8 %fib), a break below could take the pair towards 1.2463 (5 DMA).

USD/CHF: The dollar edged lower against the Swiss franc on Thursday as traders waited to hear how much more stimulus the European Central Bank plans to shovel out to address the coronavirus slump. The ECB is expected to pump in another 250-500 billion euros for the cause, but after weeks of sharp gains for stocks, oil and confidence-sensitive currencies, investors were taking the chance to lock in some profit. The ECB delivers its policy decision at 1145 GMT and its President, Christine Lagarde, holds a news conference at 1230 GMT. Immediate resistance can be seen at 0.9685(21 DMA), an upside break can trigger rise towards 0.9735 (23.6% fib).On the downside, immediate support is seen at 0.9545 (50% fib), a break below could take the pair towards 0.9458(61.8% fib ).

USD/JPY: The dollar was little changed against the Japanese yen on Thursday as a recent rally fuelled by hopes of an economic rebound ran out of steam and investors locked in profits. have dipped this week as the reopening of several global economies has reduced demand for Japanese yen and encouraged investors to venture into risky assets. The safe-haven Japanese yen fell to new two-month lows versus the U.S. dollar, at 108.90 at around 12:00 GMT .Strong resistance can be seen at 109.40 (23.6% fib), an upside break can trigger rise towards 110.00 (Psychological level).On the downside, immediate support is seen at 108.37 (200 DMA), a break below could take the pair towards 107.93 (38.2 % fib).

Equities Recap

A European stock market rally paused on Thursday, with investors focussing on a European Central Bank meeting where policymakers are expected to provide more aid for the battered euro zone economy.

At (GMT 12:00 ),UK's benchmark FTSE 100 was last trading up at 0.05 percent, Germany's Dax was up by 0.13 percent, France’s CAC was last up by 0.20 percent.

Commodities Recap

Gold prices rose on Thursday after an equity rally fuelled by signs of an economic recovery from mandated shutdowns sparked the biggest daily fall since April 30 in the previous session.

Spot gold climbed 0.4% to $1,703.95 per ounce by 0407 GMT after a 1.7% drop on Wednesday. U.S. gold futures inched up 0.1% to $1,705.70.

Oil prices dropped on Thursday on doubts over the ability of crude producers to agree to extend record output cuts, heightened by worries over a build in U.S. fuel inventories.

Brent crude futures eased by 29 cents to $39.50 a barrel by 0839 GMT, heading for its first fall in six sessions. U.S. West Texas Intermediate (WTI) crude  futures dropped 53 cents to $36.76.

Treasuries Recap

Euro zone bond yields held steady ahead of the ECB’s policy meeting where the bank is largely expected to expand its bond buying programme.

Germany’s 10-year bond yield was up 1 basis point to -0.34%, near seven-week highs. Italian 10-year yields were near one-week highs at 1.55%.

Source: FXWire

Asia markets updates on 04/06/2020

Aussie consolidates near 4-month peak, Dollar gains against Yen as risk appetite improves, investors eye ECB meeting outcome - Thursday, June 4th, 2020

Market Roundup

  • Oil prices fall on doubts over output cuts
  • Gold rises on political frictions

Economic Data Ahead

  • (0500 ET/0900 GMT) EZ Retail Sales (YoY)(Apr)
  • (0500 ET/0900 GMT) EZ Retail Sales (MoM)(Apr)

Key Events Ahead

  • (0745 ET/1145 GMT) ECB Interest Rate Decision
  • (0745 ET/1145 GMT) ECB Deposit Rate Decision

FX Beat

DXY: The dollar index rebounded from an 11-week low, as U.S. services industry activity pushed off an 11-year low in May. The greenback against a basket of currencies traded 0.2 percent up at 97.51, having touched a low of 97.19 on Wednesday, its lowest since March 12.

EUR/USD: The euro declined, halting an 8-day winning streak as a contraction in May economic activity based on the PMIs and the increase in the jobless rate dented investor sentiment. On Wednesday, the major rallied to a 2-1/2 month peak on expectations the European Central Bank would increase its pandemic-related bond purchases later in the day to shore up the coronavirus-stricken economy. The European currency traded 0.1 percent down at 1.1218, having touched a high of 1.1257 the day before, its highest since March 12. Investors’ attention will remain on a series of data from Eurozone economies, EZ retail sales, and ECB interest rate decision, ahead of the U.S. trade balance, nonfarm productivity, unit labor costs and unemployment benefit claims figures. Immediate resistance is located at 1.1285, a break above targets 1.1310. On the downside, support is seen at 1.1189, a break below could drag it below 1.1142 (5-DMA).

USD/JPY: The dollar surged to a near 2-month high on signs of an economic rebound from a coronavirus-led slump. Data released on Wednesday showed U.S. private payrolls fell less than expected in May, suggesting layoffs were abating as businesses reopen. The major was trading 0.1 percent up at 109.02, having hit a high of 109.10 earlier, its highest since April 7. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. trade balance, nonfarm productivity, unit labor costs and unemployment benefit claims figures. Immediate resistance is located at 109.40, a break above targets 109.70. On the downside, support is seen at 108.39, a break below could take it near at 108.10 (5-DMA).

GBP/USD: Sterling eased from an over 1-month peak hit in the previous session, after a Reuters poll showed that the British pound will give up its recent gains against the dollar if Britain does not ask for an extension to its Brexit transition period by a June 30 deadline to allow more time for talks on a trade deal with the EU. The major traded 0.3 percent down at 1.2541, having hit a high of 1.2615 on Wednesday, it’s highest since April 30. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2643, a break above could take it near 1.2706. On the downside, support is seen at 1.2455 (5-DMA), a break below targets 1.2405. Against the euro, the pound was trading 0.2 percent down at 89.46 pence, having hit a low of 90.54 on Friday, it’s lowest since March 27.

AUD/USD: The Australian dollar nudged lower after rallying to a 4-month high the day before on optimism over the reopening of economies around the world. The Aussie trades 0.1 percent down at 0.6909, having hit a high of 0.6982 on Wednesday, it’s highest since Jan 3. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6991, a break above could take it near 0.7031. On the downside, support is seen at 0.6837, a break below targets 0.6782.

Equities Recap

Asian shares rallied to a 2-month high as government stimulus expectations supported investor confidence in an economic recovery from the global coronavirus pandemic.

MSCI's broadest index of Asia-Pacific shares outside Japan surged 0.4 percent.

Tokyo's Nikkei rallied 0.4 percent to 22,709.83 points, Australia's S&P/ASX 200 index surged 0.8 percent to 5,991.80 points. South Korea's KOSPI jumped 0.1 percent to 2,149.50 points.

Shanghai composite index eased 0.1 percent to 2,919.86 points, while CSI 300 index traded 0.05 percent up at 3,983.93 points.

Hong Kong’s Hang Seng traded 0.05 percent higher at 24,334.01 points. Taiwan shares added 0.7 percent to 11,393.23 points.

Commodities Recap

Crude oil prices declined, extending previous session losses, on concern over whether major crude producers will be able to agree to extend record output cuts, heightened by worries over a huge build in U.S. distillate inventories. International benchmark Brent crude was trading 0.5 percent lower at $39.17 per barrel by 0533 GMT, having hit a high of $40.51 on Wednesday, its highest since March 9. U.S. West Texas Intermediate was trading 0.6 percent down at $36.50 a barrel, after rising as high as $38.15 on Wednesday, its highest since March 9.

Gold prices rebounded from a 4-week low hit in the prior session as lingering political tensions and a weaker dollar boosted safe-haven demand. Spot gold surged 0.3 percent to $1,702.44 per ounce by 0537 GMT, having touched a low of $1,689.58 on Wednesday, its lowest since May 7. U.S. gold futures were flat at $1,704.90.

Treasuries Recap

On Wednesday, the yield on the benchmark U.S. 10-year note was up 8.6 basis points at 0.7656 percent, its highest level since April. The two-year U.S. Treasury yield was up 3.2 basis points at 0.1998 percent.

 

Source: FXWire

Wall Street Breakfast: More Coronavirus Stimulus

All eyes today will be on the ECB's latest policy decision at 7:45 a.m. ET, with President Christine Lagarde speaking 45 minutes later. Anything less than a widely anticipated increase to the €750B Pandemic Emergency Purchase Program could trigger a market shock (remember in March when Lagarde inadvertently said the ECB was "not here to close [bond] spreads"?) A shot in the arm would come as eurozone powerhouse Germany, which has maintained a stance of fiscal prudence, took steps to accelerate a recovery from the coronavirus pandemic. Angela Merkel's coalition agreed on a sweeping €130B stimulus package - designed to spur consumer spending and business investment - and exceeded the top end of expectations by 30%.

Business is business?

Two of Hong Kong's biggest banks are backing China's controversial national security law a week after former Hong Kong chief executive Leung Chun-ying blasted HSBC for its silence. HSBC said on social media that it "respects and supports all laws that stabilize Hong Kong's social order," while Standard Chartered (OTCPK:SCBFF) later announced it believed the law can "help maintain the long term economic and social stability of Hong Kong." HSBC -1.1% premarket.

Tit-for-tat

Beijing is relaxing coronavirus restrictions to allow more foreign carriers to fly to the mainland after Washington retaliated against China's curbs on U.S. passenger airlines by barring Chinese airlines from entering the U.S., effective June 16. Qualifying foreign carriers currently prohibited from operating routes to China will now be allowed once-a-week flights into a city of their choosing starting June 8. The move is the latest in a long list of U.S.-China frictions over issues like trade, the coronavirus pandemic and treatment of Hong Kong.

Rally on pause

The S&P 500 rose for a fourth straight day on Wednesday, trimming its YTD loss to just 3.3%, though futures are pointing to a lower open, down 0.6% at the time of writing. Data today will likely show that the number of Americans filing for unemployment benefits last week dropped below 2M for the first time since mid-March, though the figure still remains astonishingly high. Elsewhere, oil retreated as hopes for an early OPEC+ meeting were dashed by a long-running feud over complying with production cutbacks.

Fed expands muni lending facility

The central bank will allow all U.S. states to have at least two cities or counties eligible to directly issue notes to the Municipal Liquidity Facility "regardless of population." Governors will also be able to designate two issuers in their jurisdictions whose revenues are generally derived from government activities, such as public transit, airports, toll facilities, and utilities, to be eligible to directly use the facility. The MLF was formed to offer up to $500B in lending to states and municipalities to help manage cash flow stresses caused by the COVID-19 pandemic.

Warp Speed initiative

Aimed at following through on a pledge to have a COVID-19 vaccine available in the next 2-3 quarters under Operation Warp Speed, the Trump administration has selected five "finalists" for development. Companies include Moderna (NASDAQ:MRNA), AstraZeneca (NYSE:AZN), Johnson & Johnson (NYSE:JNJ), Merck (NYSE:MRK) and Pfizer (NYSE:PFE), but not GlaxoSmithKline (NYSE:GSK) and Sanofi (NASDAQ:SNY). About 30K people will take part in Phase 3 trials, meaning that a total of 150K people could be vaccinated.
Go deeper: Roche's severe COVID-19 test scores FDA approval.

Empty display cases

Walmart (NYSE:WMT) has pulled firearms and ammunition from the sales floors of some stores as widespread protests continue across the U.S. and, in some cases, have led to looting. Customers can still purchase these items, which are being stored in secured rooms. How much damage has occurred? "We've had some stores where we've had inventory lost and some physical damage, but it's not very many stores as a percent of total," Walmart CEO Doug McMillon declared.

GM aims to preempt Tesla

Suppliers familiar with such plans at GM (NYSE:GM) and Ford told Reuters the Detroit automakers, which count trucks and commercial vehicles among their most profitable businesses, "don't want to leave the door open for Tesla (NASDAQ:TSLA)" as they did with passenger cars. The electric van - code-named BV1 – is reportedly aimed at business users, due to start production in late 2021 and will share some components with GM's future electric pickups and SUVs. Still under consideration is whether to offer the vehicle through its traditional truck brands, Chevrolet and GMC, or market it under a different brand like Maven.

 

What else is happening...

ZoomInfo (ZIprices IPO at $21, above target.

LVMH (OTCPK:LVMHF) appears to quash Tiffany (NYSE:TIF) deal rumors.

Fitbit (NYSE:FIT) ventilator gains emergency use authorization.

Chicken industry executives indicted for price fixing.

Amazon (NASDAQ:AMZNleases 12 aircraft to bolster air cargo fleet.

Oil producers pull non-essential workers from Gulf of Mexico.

Why isn't Facebook (NASDAQ:FB) using its Oversight Board for Trump posts?

 

Wednesday's Key Earnings

American Eagle (NYSE:AEO+14.7% pulling cash-preserving lever.

Campbell Soup (NYSE:CPB-6.1% reversing earlier gains.

Canada Goose (NYSE:GOOS+17.7% as margins improved.

Cloudera (NYSE:CLDR-11.9% AH giving light revenue guidance.

Today's Markets

In Asia, Japan +0.4%. Hong Kong +0.2%. China -0.2%. India -0.4%.

In Europe, at midday, London -0.4%. Paris -0.7%. Frankfurt -0.8%.

Futures at 6:20, Dow -0.6%. S&P -0.6%. Nasdaq -0.3%. Crude -1.8% to $36.62. Gold +0.5% to $1712.40. Bitcoin -0.5% to $9533.

Ten-year Treasury Yield -2 bps to 0.75%

 

Today's Economic Calendar

7:30 Challenger Job-Cut Report

8:30 Initial Jobless Claims

8:30 Productivity and Costs

8:30 International Trade

10:30 EIA Natural Gas Inventory

4:30 PM Money Supply

4:30 PM Fed Balance Sheet

ECB decision as Germany finalizes mega stimulus

    • All eyes today will be on ECB's latest policy decision at 7:45 a.m. ET, with President Christine Lagarde speaking 45 minutes later.
    • Anything less than a widely anticipated increase to the €750B Pandemic Emergency Purchase Program could trigger a market shock (remember in March when Lagarde inadvertently said the ECB was "not here to close [bond] spreads"?)
    • A shot in the arm would come as eurozone powerhouse Germany, which has maintained a stance of fiscal prudence, took steps to accelerate a recovery from the coronavirus pandemic.
    • Angela Merkel's coalition agreed on a sweeping €130B stimulus package - designed to spur consumer spending and businesses investment - and exceeded the top end of expectations by 30%.
    • Euro -0.3% to $1.1201.
    • ETFs: FXE, EWGEUODAXOTC:EROGFHEWGDRREWGSDXGEULEEUFXDBGRURRDEURFGMDLBRFLGRUEUR, ZDEU

Why isn’t Facebook using Oversight Board for Trump posts?

    • "How Facebook treats posts from public figures that may violate their community standards are within the scope of the Board, and are the type of highly challenging cases that the Board expects to consider when we begin operating in the coming months," the board wrote in a blog post.
    • "As an institution that announced our first members less than a month ago, and which will not be operational until later this year, we are not in an immediate position to make decisions on issues like those we see unfolding today."
    • Facebook (NASDAQ:FB) announced the Oversight Board's bylaws in January, and in May, appointed its first 20 members.
    • Previously: Zuckerberg defends easy approach on Trump posts (Jun. 02 2020)

Hong Kong legislature passes controversial China national anthem bill

HONG KONG (Reuters) - Hong Kong’s Legislative Council passed a controversial national anthem bill on Thursday that would make disrespecting China’s national anthem a criminal offence, a move critics see as the latest sign of Beijing’s tightening grip on the city.

The ruling could stoke further protests just as people in Hong Kong are set to commemorate the bloody 1989 crackdown by Chinese troops in and around Tiananmen Square by lighting candles across the city.