Overnight, Wall Street stocks continued to climb higher, with the Nasdaq hitting another record high. The Dow Jones Industrial Average was up 0.5%, the S&P 500 rose 0.4% and the tech-heavy Nasdaq Composite gained 0.7%. Upbeat economic data fueled investor optimism as new home sales jumped 16.6% in May to 676,000 versus 640,000 expected. Meanwhile, the IHS Markit’s index of purchasing managers rose t0 46.8 in June from 37 in the previous month, nearing the threshold of 50.
Today in Asia, equities were mixed as investors continued to monitor the rising number of COVID-19 cases in the U.S. and other countries. According to Johns Hopkins University data, there are now over 9.2 million cases globally. Hong Kong’s Hang Seng dipped 0.50% ahead of the National People’s Congress Standing Committee meeting due over the weekend. According to the latest news, the committee could enact national security laws in both Hong Kong and Macau this month already.
European stocks opened lower on Wednesday as markets struggled to gain traction amid rising coronavirus cases in some countries. On the positive side, The European Central Bank chief economist Philip Lane said that they saw some signs of initial recovery. He also highlighted that the outcome of negotiations about the EU recovery fund will be an important factor in determining the future path for the Eurozone economy. Still, stocks remained in the red as investors expressed concerns over the coronavirus-related developments.
On the data front, Germany June Ifo business climate index came in at 86.2 versus 85.0 expected. The current assessment arrived at 81.3 versus 84.0 expected, and the expectations index came in at 91.4 versus 87.0. According to Ifo, the rebound in June was the strongest increase recorded in the survey’s history.
Despite decent economic data, EURUSD failed to stay in the positive territory and turned red on the daily timeframes. Yesterday, the pair was rejected from local highs around 1.1350 and is now back below the 1.13 handle as the safe-haven dollar demand picks up amid the worsening risk sentiment. If the tone in the markets continues to deteriorate, the euro will likely suffer further losses in the short term.