There is not much happening in the markets. News that new coronavirus cases continue surging, especially in South America, continues to be a cause for concern, which firms demand in technology stocks. There is decreased appetite for cyclical sectors, such as financials and energy. With major central bank announcements behind, it is fair we see a consolidation across the global stock markets.
On the US-China trade front, Donald Trump reassured investors that the phase-one deal remains intact after his adviser Peter Navarro caused a short-lived panic in the market as his Fox News interview spread confusion regarding the faith of the trade agreement.
US stock futures were flat in the overnight trading session. Most Asian indices were positive, but gains remained limited.
FTSE (+0.42%) and DAX futures (+0.99%) hint at a positive start but the thin holiday volumes could lead to a choppy trading session and a lack of a clear market direction.
PMI data is what investors are watching at the start of the week. The latest numbers from Australia suggest an encouraging recovery in manufacturing, while services PMI printed a strong 53.2. Any number above the 50 threshold points at an economic expansion. In Japan, however, improvement in both manufacturing and services sectors was slower.
Today, the Eurozone, the UK and the US will announce their May preliminary PMI figures. Strong figures would clearly better the market mood amid rising fears of a second wave contamination, bring investors to sell their US dollars versus more promising currencies in a risk-on environment.
For now, the US dollar index is steady near the 97 mark, as the US 10-year yield remains close to 0.70%.
Firm demand in yen, Swiss franc and gold suggests that the sentiment remains fragile and gains in risk assets may be in jeopardy.
