Covid Hedge Wave, British Freedom Day, OPEC Peace Agreement


© Reuters.

Jeffrey Smith

Investing.com-The surge in Covid-19 cases has triggered a wave of risk aversion around the world, plunged England’s “Freedom Day” into chaos and pushed prices below $70. President Joe Biden accused Facebook (Nass Daq stock code:) Killing people with vaccines, misinformation, and Zoom Video acquired Five9 (Nasdaq stock code:) for $15 billion in stocks. IBM (New York Stock Exchange:), Pros (NYSE:) and JB Hunt (NASDAQ:) report earnings. Here is the information you need to know in the financial markets on Monday, July 19.

1. The safe-haven wave boosts the U.S. dollar

The U.S. dollar touched its highest level against major currencies in more than three months, as evidence of rising global Covid-19 cases continues to increase, raising doubts about the sustainability of the global recovery.

The U.S. dollar index, which tracks the U.S. dollar against a basket of currencies in six advanced economies, broke through the 93 level for the first time since early April, hitting an intraday high of 93.047, and then fell slightly to 92.980 at 6:15 a.m. Eastern Time (1015 GMT). ), up 0.3% on the day.

The U.S. dollar also rose across the board against emerging market currencies, with gains of more than 0.5% against the South African Rand, Mexico and Chilean peso, continuing the safe-haven trend that has begun in response to recent signs of China’s economic cooling.

The hedging trend of the bond market is also obvious, falling back to the five-month low of 1.25% hit last week.

2. England’s “Freedom Day” chaos

The Delta variant spread the fastest in the UK, where it completely disrupted Prime Minister Boris Johnson’s plan for a feel-good “Freedom Day.”

Today, almost all official restrictions on business and social life in England have been lifted, but the number of cases is spiralling and public confidence is rapidly deteriorating. The UK announced more than 50,000 new cases on Saturday, which is comparable to Indonesia, which has become a global epidemic hot spot in recent weeks (although the UK’s detection rate is also much higher than in many countries).

Johnson himself was forced to spend a week in self-isolation after contacting the new Minister of Health, Sajid Javid, who tested positive last week. At the same time, tracking apps in the UK have issued so many self-isolation instructions that public transport, supermarkets and truck drivers have warned of a serious shortage of personnel. The pound fell to its lowest point in three months.

3. The stock opened lower; Zoom purchased Five9; IBM, Prologis maturity income

The U.S. stock market will sharply lower later, and the wave of risk aversion has moved them further away from the historical highs set last week.

By 6:15 am, it was down 351 points, or 1.0%, and down 0.7%. Nasdaq futures performed well, falling only 0.3%. This is a familiar pattern in the days of “reopening trading” reversal.

Stocks that may become the focus later include Zoom Video, which said over the weekend that it will acquire cloud software provider Five9 in a $15 billion all-stock transaction, the largest acquisition in its history.

Also worth noting are the earnings of Prologis, PPG Industries (NYSE:) and JB Hunt, and IBM will release a report after the close.

4. Biden attacked Facebook

Facebook will also start this week after President Joe Biden accused the social media giant of allowing anti-vaccineists to spread misinformation about the Covid-19 vaccine “killing” on its platform.

“Our only epidemic is the unvaccinated people. They are killing people,” Biden said.

On Sunday, surgeon Vivek Murthy adopted his comments, who repeatedly criticized “tech companies” for not doing enough to remove or flag inaccurate content.

Facebook refuted these allegations, which marked a new low in its relationship with the Democratic Party. Senator Ted Cruz led a round of counterattacks against the government, accusing it of trying to stifle freedom of speech.

5 OPEC peace agreement cannot save oil prices

After Saudi Arabia and the United Arab Emirates resolved their differences in production policies and paved the way for a series of gradual production increases by OPEC and its allies, oil prices fell below $70 a barrel for the first time in more than a month.

According to the peace agreement, the so-called OPEC+ group will increase production by 400,000 barrels per month from August 2022 to the end of 2022. At that time, it will restore all production cuts in response to the global economic collapse. The needs in the early stages of the epidemic.

As far as the UAE is concerned, it has gained more weight in the calculation of market share among OPEC member states.

Many analysts believe that the transaction has broad support for price and OPEC’s credibility, but the wave of risk aversion that hit most asset classes on Monday offset these factors. Futures fell 2.7% to US$71.63 per barrel.





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