Global markets started the week on a bearish note, amid fears over a resurgence of coronavirus cases. The World Health Organization reported a record increase in global coronavirus cases on Sunday, with more than 183 thousand cases in a 24-hour period. Brazil led with nearly 55,000 new cases, followed by the United States with more than 36,000 and India with about 15,000 new cases.
US equity futures recovered from the early losses, U.S. S&P 500 futures rose 0.3%. While European and UK shares also rebounded from the losses as investors remain optimistic over a quick economic recovery despite a spike in new coronavirus infections.
Oil prices were steady on Monday, supported by tighter supplies from major producers. The OPEC members Iraq and Kazakhstan agreed to increase their compliance with the deeper supply cuts agreed on by OPEC+ nations, which should help stabilize oil markets even further.
Commodity currencies like the Australian dollar and New Zealand dollar recovered from the early losses and both pairs trading 80 pips higher during the European session. Australian dollar rebounded after Reserve Bank of Australia Governor Philip Lowe said today that Australia had "a fantastic set of underlying fundamentals" and upgraded his estimate for employment.
Gold prices edged higher during the early Asian session on Monday followed by the rising fears of the second wave of coronavirus gave a push to gold price to reach fresh month high- $1758.
On the data front, the People’s Bank of China kept its benchmark lending rate unchanged with the 1-year loan prime rate left at 3.85%. The 5-year loan prime rate was also kept steady at 4.65%.
Moving ahead to the week the investors will closely watch how the countries battle against second wave coronavirus infections and updates from India-China border tensions. The main important events to watch this week RBNZ monetary policy decision, flash PMI surveys for the UK, Eurozone, Japan, Australia and US Q1 GDP.
The number of confirmed cases of coronavirus around the world is approaching 9 million, of which more than 465 thousand died and over 4 million recovered. Meanwhile, Spain reopened to most European tourists on Sunday, after weathering a brutal outbreak that killed more than 28,000 people. Spanish Prime Minister Pedro Sanchez urged people to take maximum precautions: "The virus can return and it can hit us again in a second wave, and we have to do whatever we can to avoid that at all cost." In India the coronavirus cases climbed by nearly 15,000 as of Monday to 425,282, with more than 13,000 deaths, the health ministry reported.
GOLD: During the European session the gold price trading slightly down from fresh monthly high - $1758.
The important levels to watch for today: Support- $1744 and $1732 Resistance- $1765 and $1776.
EUR/USD: The pair up slightly on USD weakness, supported by 1.1140/50. Any break below 1.1140 will open doors to 1.1110 demand zone.
The important levels to watch for today: Support- 1.1150 and 1.110 Resistance- 1.1240 and 1.1290.
Quote of the day: In investing, what is comfortable is rarely profitable – Robert Arnott.
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