US dollar
The market mood is sour as COVID-19 statistics in the American south continue to rise at an alarming rate.
The number of new cases is accelerating in many other states including Florida, Houston is about to reach full capacity in its hospitals, and Arizona does is unable to keep up with the pace of testing.
Moreover, states in the greater New York area want those coming from the infected southern states to quarantine, and even deaths from the disease are on the rise after a constant decline.
Another factor weighing on the market mood, is the downgrade of forecasts from the International Monetary Fund, which now projects a downfall of 4.9% in 2020. It also laid out an L-shaped scenario that sees no growth in 2021.
The US dollar is the primary beneficiary, gaining ground against all currencies, including the safe-haven yen. EUR/USD is stabilizing at the lower ground ahead of the European Central Bank’s meeting minutes release for its June meeting when it decided to boost its bond-buying scheme. GBP/USD is trading above 1.24 but off the highs. The UK government is struggling with criticism about his handling of the crisis.
Gold prices are consolidating their gains around $1,765 after hitting new 7.5-year highs on Wednesday. WTI oil is trading around $37, at lower ground as an increase in inventories joined the risk-off mood.
In the absence of any major market-moving economic releases from the UK and the EU, market participants will focus on to the ECB monetary policy meeting minutes for a fresh impetus.
The US calendar is packed with three top events: The final Gross Domestic Product release will likely confirm the 5% annualized contraction in the first quarter. Durable Goods Orders are projected to rebound in May after tumbling in April. The final economic statistic to watch is weekly Jobless Claims, forecast to resume their slide. Continuing claims are also of importance, as they are for the same week when the Non-Farm Payrolls surveys are held.