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Daily wrap up 29 June 2021

29 Jun 2021 05:41 PM

Stock markets in Europe are showing solid gains we approach the end of the trading session. Headlines about the rise in Covid-19 cases are still doing the rounds but that has not influenced sentiment in this part of the world. The eurozone’s survey of economic sentiment increased from 114.5 to 117.9 in June – its highest in 21 years. The high vaccination rates across Europe have led to governments easing restrictions, and in turn, the reopening of economies, which has boosted indices.

Confidence is running high in the US too as the Conference Board consumer confidence report jumped from 120 to 127.3. It is obvious that pent-up demand is being unleashed and that has helped US stocks set a new all-time high. Equities are being assisted by the upbeat mood but at the same time, dealers are confident that interest rates will remain at rock-bottom levels in the near-term. Friday’s job report is likely to be the highlight of the week as it should give us an indication of how the labour market is recovering, or not, be it the case. It is worth remembering, the last update, showed that the unemployment rate fell to 5.8%.

Oil continues to see high volatility. In the early hours, the energy sold-off over fears of demand being hurt on account of the rising number of coronavirus cases, the delta variant, is acting as a thorn in the side of several governments. In the past few hours, oil has swung back into positive territory. Later this week, OPEC+ will meet to discuss their plans in relation to output. There is speculation the group will confirm that output will be lifted from August, but the real question will be, what scale of an output change will be delivered.

The US dollar is the standout performer on the currency markets today as it hit its highest level in over one week. There has been little in the way of economic news to drive up the dollar but towards the end of last week, we saw signs of a bottom being formed. EUR/USD, GBP/USD and the AUD/USD are all lower today. Gold has tumbled to its lowest mark since mid-April as the rally in the dollar has taken the shine off the metal. Platinum, copper and palladium are in the red too.

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