Daily summary: Bulls struggle to push equities higher

• Weak PMI data from Europe
• Pfizer hopes for October vaccine approval
• US PMI readings above expectations

 

European indices finished final session of the week lower  as weak PMIs readings from Europe pointed to slowing economic recovery.  Companies continued to reduce employment and new business growth declined following July's sharp increase. Investors also remain concerned about the second wave of  COVID-19 infections. Yesterday Italy recorded 845 new cases, which is the highest daily increase since May. France recorded almost 5000 new infections, a level not seen since May. Meanwhile Brexit negotiations stalled without any progress as both sides cannot reach an agreement on key issues. DAX 30 fell 0.5%, CAC 40 dropped 0.3% and FTSE 100 finished 0.2% lower.  For the week, the DAX 30 lost 1.1%, CAC40 dropped 1.35 and  FTSE 100 fell 1.4%.

US indices are trading slightly higher with the tech-heavy Nasdaq notching another record high as both US services and manufacturing PMI data came stronger than expected. Today’s figures showed that US private sector activity grew by the most for 1-1/2 years. Another report showed U.S. home sales rose at a record pace for a second straight month in July and home prices hit all-time highs. Investors also welcomed the news that  Pfizer’s vaccine is set for regulatory review in October. Meanwhile, US-China tensions continue to simmer as Trump administration on Thursday declined to acknowledge any plans to meet with China over the Phase One trade deal.

WTI crude futures fell as much as 2.5% to below $41.5 a barrel and Brent dropped 2.6%  to below $43.74 after the latest weak PMI data from Europe, declining crude oil imports from India and renewed Covid-19 restrictions raised concerns regarding the demand recovery. Moreover internal report by the OPEC+ showed it expects oil demand to fall by 9.1 million bpd this year, 100,000 bpd above the previous estimates. However, if the second wave of infections spreads to China, India, Europe and the US in the second half of the year, demand could decline even by 11.2 million bpd. Besides that that some OPEC members will be forced to reduce production by 2.31 million barrels per day to make up for their recent oversupply.

Precious metals were under pressure today for a third consecutive session, with commodity experts pointing to a resurgence in the U.S. dollar as the most likely culprit for bullion’s recent downtrend. Gold prices fell as much as 0.9% to around $1,933 an ounce while silver dropped 3.5% to around $26 an ounce.

USDCAD – pair bounced of the 1.3234 resistance, which is additionally strengthened by 200 MA (red line) and is currently testing major support at 1.32 level. Should downbeat moods prevail, next support at 1.3137 may come into play. Source: xStation5

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