Daily Update - 14th July 2020
The dollar edged lower on Monday as investors looked to U.S. corporate earnings and upcoming retail data to gauge whether guarded optimism on the economic outlook was justified. While data suggests second-quarter results will show the second-biggest quarterly drop in corporate earnings since 1968, investors maintain some degree of confidence in the U.S. consumer. The British Retail Consortium (BRC) trade body said retail sales values rose by 3.4% in annual terms in June, the biggest increase since May 2018, although the reading was flattered by the comparison with unusually weak sales in June 2019. The euro jumped sharply against the dollar on Monday, and is likely set for a bumpy ride over the next few days ahead of key developments in the European Union later this week. The strong start to the week for the euro comes as data showed ongoing investor appetite for the single currency. It’s a busier day ahead on the Eurozone economic calendar. Key stats include Germany and the Eurozone’s ZEW Economic Sentiment figures for July. With COVID-19 continued to spread across the U.S and elsewhere, July’s figures will need to improve to support the majors. Other stats include finalized inflation figures for June and the Eurozone’s industrial production figures for May. We would expect the numbers to have a relatively muted impact on the majors, however. From the U.S, it’s a relatively quiet day on the economic calendar, with June’s inflation figures due out of the U.S. We would expect the numbers to have a muted impact on the European majors, however. The focus later in the day will be on U.S earnings and banks in particular. Citigroup, JPMorgan, and Wells Fargo are due to release quarterly earnings today. Ahead of the European session, trade data from China will set the toneYesterday's Focus
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