Wall Street stocks edged higher overnight as investors were inspired by better-than-expected US retail sales data that fueled expectations for the economic recovery. Retail sales jumped by 17.7% unexpectedly after a strong May jobs report. Also, Federal Reserve Chair Jerome Powell vowed to maintain aggressive stimulus efforts in light of the hit from coronavirus shutdowns. As a result, the Dow Jones Industrial Average climbed 2.04%, the S&P 500 rose by 1.90%, and the Nasdaq Composite Index advanced 1.75%.
Asian equities were mixed but mostly higher on Wednesday after the International Monetary Fund warned that the global economy is set to see a more significant contraction than it previously forecast. The fund also said that the current crisis is “unlike anything the world has seen before.” Japan’s Nikkei 225 finished 0.56% lower after the report showed that Japan’s exports plunged over 28% year-on-year in May. Overall, the MSCI Asia ex-Japan index was 0.34% higher.
In Europe, stock markets extended gains at the start of trading on Wednesday, driven by recovery hopes that help to overshadow virus-related concerns and rising geopolitical tensions. Elsewhere, according to the German government document, Brexit negotiations only to enter their “hot phase” in September. Also, Germany reportedly said to ban large events until end-October at least.
Meanwhile, major currency pairs are little changed today as traders keep a cautious tone after a spike in short-term volatility witnessed on Tuesday.
EURUSD remains above the 1.12 handle but struggles to regain the upside impetus, being capped by the 1.1250 intermediate resistance. GBPUSD stays nearly flat despite a series of weaker-than-expected inflation data out of the UK. The pair is still stuck in a limited range between the 100- and 200-DMAs.
Elsewhere, oil prices extend gains for a fourth day in a row. Brent crude exceeded the $41 handle in recent trading, and it looks like the market will preserve the bullish bias in the short term while market focus is shifting to the EIA report due later today. A daily close above $41 will confirm the latest breakout.