TODAY ON WALL STREET: Good employment data boosts indices

07/02/2020 | 09:11am

Fresh data showing that the jobless rate fell to 11.1% in June lifted investors morale. The U.S. regained 4.8 million jobs. Markets also welcomed encouraging coronavirus vaccine trials by Pfizer and BioNTech in early-stage human tests.

Yesterday, the final results of the PMI surveys on manufacturing activity confirmed the upturn in economic activity in the euro zone, in the United States and in China. However, the mood was dampened by the acceleration of Covid-19 in the United States. The country has recorded the highest daily death toll since the beginning of the epidemic, with 48,000 new cases in 24 hours.

This intensified the bullish reactions of markets following the announcement of encouraging results on the development of a potential vaccine.

Fed officials have reiterated the Federal Reserve's willingness to do everything possible to halt the economic decline in the United States. The institution is ready to use all the instruments at its disposal to achieve its objective of full employment and price stability.

The U.S. central bank yesterday released the minutes of its June 9-10 meeting. At this meeting, Fed officials discussed the possibilities they had for further support for the economy. They showed their commitment to the solutions already in place, including keeping rates low at least until 2022. On the other hand, the idea of capping the yields on US Treasury bonds (as is the case in Japan and Australia for example) was not adopted, but the door was not completely closed.

Yesterday the United Kingdom stated that China's National Security Act was a serious breach of the Hong Kong Treaty, while reiterating their proposal to give British National (Overseas) passport holders an easy way to acquire British citizenship. Australia also offered a similar proposal yesterday. On the US side, the House of Representatives finally passed the law penalizing banks doing business with Chinese officials linked to the implementation of the security law. China said it would retaliate.

 

Romain Fournier
© MarketScreener.com 2020
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