Financial Markets Daily Report
03 July 2020

Stocks rallied in yesterday's session, supported by recovering economic data. In particular, U.S. nonfarm payrolls surged by 4.8 million in June –the largest increase on record, even though the unemployment rate still stood above 10% (11.1% in June down from 13.3% in May). Yet, U.S. sovereign yields nudged down and the USD strengthened.

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  • Stocks rallied in yesterday's session, supported by recovering economic data. In particular, U.S. nonfarm payrolls surged by 4.8 million in June –the largest increase on record, even though the unemployment rate still stood above 10% (11.1% in June down from 13.3% in May). Yet, U.S. sovereign yields nudged down and the USD strengthened.
  • Investor optimism also fueled an increase in commodity prices, and the barrel of Brent rose to $43.
  • In the euro area, core and peripheral yields declined as ECB's Mersch explained that they had shared with Germany's government documents showing how officials constantly evaluate the proportionality of their measures (as questioned by German courts). He concluded there are no obstacles to the Bundesbank's participation in the PSPP.
  • In Spain, employment rose by 68k workers in June, and employees on furlough declined by 1.2 million (down to 1.8 million). Yet, registered unemployment rose by 5k workers and total unemployment stood at 3.8 million (+28% yoy).
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