Wall Street stocks gained on Wednesday driven by optimism about a possible global recovery from the coronavirus pandemic. Also, the markets were supported by more optimistic economic updates than expected. In particular, ADP data showed that private employers cut nearly 2.8 million jobs in May, much less than the 9.3 million expected. The release raised optimism ahead of the key jobs report due on Friday. As a result, the S&P 500 rose 1.4%, the Dow Jones Industrial Average gained 2% and the Nasdaq composite added 0.8%.
However, market sentiment started to deteriorate on Thursday, and Asian equities saw mixed dynamics during the session. China’s Shanghai Composite Index dipped 0.14% amid a decline in the domestic airline shares after Trump’s administration said it will bar Chinese passenger carriers from flying to the United States from June 16. On the positive side, Sydney’s S&P/ASX 200 advanced 0.84%.
In Europe, stocks opened lower nearly across the board and remain on the defensive after decent gains seen since the start of the week. Investors proceeded to profit-taking ahead of the ECB policy meeting despite the central bank is widely expected to deliver additional stimulus measures in a bid to support the regional economy amid the coronavirus pandemic that caused a deep downturn in business activity.
Meanwhile, dollar demand started to pick up as risk sentiment keeps deteriorating. As such, EURUSD is desperately trying to cling to the 1.12 handle after a rejection from yesterday’s highs above 1.1250. Later in the day, the ECB meeting will set the tone for the pair. More upbeat comments on the state and the outlook for the Eurozone economy could give a lift to the common currency. In a positive scenario, EURUSD will validate the 1/12 as support and could even challenge the recent tops if risk sentiment improves any time soon.