Boris Johnson Faces More Questions Today

UNITED STATES

The S&P 500 index trimmed its gains amid U.S, – China tensions, the index closed at an 11-week high as it rose 0.6% and added 1.2% on Tuesday. A bit more attention in the U.S markets would be on the U.S jobless claims reading for the week, which is tomorrow, and Jerome Powell’s expected virtual discussion on Friday.

UNITED KINGDOM

Pressure has continued to mount on the U.K Prime Minister over his support for his top chief aide, Dominic Cummings, with an expectation he would be facing an hour and a half of questioning from senior members of the Parliament today. We do expect the subject to be his handling of the coronavirus crisis in general with some spotlight on his support for Cummings breaking lockdown rules.

EUROPEAN UNION

The ECB is ready to expand any of its instruments if it concludes that the medium-term inflation outlook has indeed worsened. The central bank’s Governing Council is seen as increasingly likely to increase the size of its 750 billion-euro ($822 billion) emergency asset purchase program when it meets next week. Officials have debated the need to remove a constraint on its bond buying that ties purchases to the size of the euro’s constituent economies.

ASIA

The Asian markets were mixed in early trading on Wednesday as the US-Chinese tensions over Hong Kong vied with buoyancy about recovery from the coronavirus pandemic. The Hang Seng index HSI, -1.05% in Hong Kong sank 0.3% and the Shanghai Composite Index SHCOMP, -0.48% lost 0.1% while The Nikkei 225 NIK, +0.69% in Tokyo recovered from early losses to gain 0.7%.

OIL

Oil has declined from its opening levels today from its highest settlement in over 11 weeks as signs from Russia show they may intend to start easing supply cuts from July, while tensions between the U.S and China seem to have escalated amid the specter of sanctions.  The Brent crude futures fell c.1.4% to $35.67 on the back of tensions in Hong Kong over how quickly demand will recover, while the U.S-China tensions also added to some negative sentiments as well.  The U.S. West Texas Intermediate (WTI) crude futures also went down 52 cents, or c.1.5%, at $33.83 a barrel.