FOREX TRADING STRATEGY JUN 8 - POSITIVE VIEW
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Asian stocks are likely to start the new week with a gain after the US employment report released on Friday showed results that were better than expected and underpinned hopes for a recovery. Fast. The futures market in Japan and Hong Kong both increased, the Australian market holiday. Futures on the US stock index futures jumped in early Asia, while the dollar traded mixed with G10 currencies after a long slide on Friday.
After the employment data was released, the S&P 500 rose more than 2.6% at the close and posted gains for the third week in a row, making the index more than 40% higher than the March’s bottom. Treasury Bond yields rose to an 11-week high. Meanwhile, China's trade surplus rose to a record in May as exports fell less than expected, supported by an increase in health-related sales. Elsewhere, oil seems to extend its gains after a six-week rally since OPEC agreed to extend another month for a record-cut output.
A super deal
The two drug manufacturers behind some of the industry's most striking responses to the Covid-19 pandemic are considering the possibility of a future of cooperation as economies have just emerged from a blockade. AstraZeneca, co-developer of one of the fastest-growing experimental coronavirus vaccines, made a preliminary approach with Gilead Science, the manufacturer of remdesivir - the only treatment available. United States approval. If they decide to pursue the merger, this will be the biggest deal ever in this area, giving AstraZeneca a market capitalization of over $200 billion.
China plans to increase spending to support an economy that is facing an inevitable challenge: income declines caused by the recession from the pandemic. The government estimates that most major sources of income will decline in 2020, with sales expected to fall by 5.3% this year - according to Ministry of Finance estimates. This will be the first drop in at least 2 decades. With the decline combined by tax breaks to help companies survive, Beijing plans to issue 70% more bonds this year to fill that gap and meet demand. stimulate the economy. According to Wang Zecai, a researcher at the Chinese Academy of Financial Sciences, "Although the government can use the money left over from previous years or other revenue to fill the current gap, this gap will still put pressure on spending." This will be a test of fiscal ability at all levels for China.
Hong Kong real estate
A controversial security law that threatens Hong Kong's position as an Asian financial hub cannot stagnate the world's most expensive real estate market. Last week, dozens of people who wanted to buy real estate were lined up to get the opportunity to auction 94 apartments in The Campton project in the center of Kowloon, with a starting price of 6.8 million Hong Kong dollars ($872,400) for one-bedroom apartments. Data from Centaline Property Agency shows that real estate prices in Hong Kong have increased by 230% since 2000, which reinforces the views of many residents that real estate will always be a safe haven.
There is a lot of positive momentum in risky assets, so there is hardly any barrier that can hinder the rise in emerging markets, at least in the coming days. US May jobs report with better-than-expected results and OPEC+ weekend agreement for a one-month extension of record production cuts could add to optimism about prospects of recovering the global economy, at the same time reinforcing risky assets. JPMorgan Chase & Co.'s measure of implied volatility in emerging market currencies has had the strongest weekly decline since 2011.
The stock has thus enjoyed the best week since 2011, while the domestic bond index reached the highest level since the beginning of March. The Federal Reserve is expected to keep interest rates close to zero when policymakers meet on Wednesday, during which time investors will be watching for clues about another round of stimulus in comments. of Fed Chairman - Mr. Jerome Powell. Technical indicators show the prospects for the assets of developing countries seem promising, while the dollar is wavering.