CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

Europe Expected to Drift Lower As Reopening Optimism Fades

Article By: ,  Senior Market Analyst
June 24, 2020 3:01 AM

Reopening optimism is showing signs of fading with European stocks pointing to a lower open following a day of strong gains. The same stubborn optimism that saw Asian stocks creep up to 4-month highs overnight is not being felt here in Europe. A quiet economic calendar will leave risk sentiment in the driving seat. However, the mixed performance of risk catalysts is confusing investors.


Whilst Boris Johnson announced the easing of more lockdown restrictions as from 4th July, the reduction of the 2-meter rule to 1 meter is unnerving investors following harsh criticism from scientists. Reducing that distance just by one meter increases the chances of getting the infection 10-fold, making localised flare ups and a second wave increasingly more likely.
Coronavirus news has been far from good on a global scale. Several states in the US continue to see record daily rises, whist the death toll is South America has topped 100,000. Yet investors assume that there is a small chance of a second lockdown on the scale of what we have just experienced.

PMI data pointed to resilience in economies
Data in the previous session has show that economies across Europe have been particularly resilient with business activity picking up across the board. PMI data for the UK showed that the contraction in service sector and manufacturing activity slowed as the sectors continued to rebound from the April nadir. France, outperformed showing that the easing of lockdown measures had resulted in business activity quickly returning to expansion.

German IFO business sentiment data in focus
The economic calendar in Europe is quiet today. German IFO business sentiment for June is under the spotlight. Optimism is seen recovering further this month to 85, fromb79.5 in May. The assessment of the current situation is also seen improving from 78.9 to 84. The market mood could suffer a setback should the figures disappoint. A strong reading could see EUR/USD test resistance at $1.1422.

Oil extends slide, EIA data in focus
Oil is extending losses from the previous session after US crude stockpiles grew by more than expected, fuelling concerns over oversupply. Crude inventories rose by a larger 1.7 million barrels last week, according to the American Institute of Petroleum, significantly ahead of the 300,000-build forecast. EIA data will be keenly awaited today. 
Oil has had a good run, rallying over 4% in just 3 days prior to yesterday’s data. The significant build in inventories was seen as a good catalyst to book profits. On Tuesday oil had been trading at its highest level since prices collapsed in early March. 

FTSE Chart


StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024