CFD Markets News and Forecasts — 04-06-2020

FXStreet notes that the euro has accelerated its rally on Wednesday, boosted by the ECB’s pledge to step up its coronavirus emergence stimulus and the FX analysis team at Nordea Bank expect this trend to continue in the near future.

“The tail is probably heavy on the high side for the EUR/USD (>1.20) outcome space, but compared to e.g. SEK, NOK and AUD, it could be argued that the EUR needs to catch up a bit just to reflect the post “peak corona fear” world.”

“We go long EUR/USD with a target of 1.1670 and an S/L of 1.0780.”

FXStreet reports that economist at UOB Group Lee Sue Ann assessed the latest GDP figures in Australia for the January-March period.

“Australia’s GDP contracted by 0.3% q/q in 1Q20, from an expansion of 0.5% q/q in 4Q19, and a tad above expectations of -0.4% q/q. The negative quarter is only the fourth time this century the economy has gone backward in a three month period. The last recession was in 1990-91. The last time Australia's national accounts showed a contraction in economic growth was in March 2011.”

“Growth in the second quarter is expected to be far worse, with the full impact of the COVID-19 pandemic putting around 1 million people out of work, and prompting unprecedented stimulus from both fiscal and monetary authorities in March. We are expecting a large fall in GDP in 2Q20 of - 4.6% y/y, followed by smaller contractions of -2.8% y/y in 3Q20 and -0.9% y/y in 4Q20.”

“We do not see further reductions in the cash rate, with negative rates ruled out by RBA Governor Phillip Lowe (for now). The focus will thus remain firmly on end-user rates via the yield curve target, as well as ensuring sufficient liquidity in bond markets and the free flow of credit to households and businesses. Given our view of a further rise in the unemployment rate, we also expect labour market indicators to be important for policy going forward.”

FXStreet notes that the ECB expanded its Pandemic Emergency Purchase Programme (PEPP) by €600 billion and extended its horizon to at least the end of June 2021. The news pushed bond yields lower and strengthened the EUR, analysts at Nordea inform.

“The size of the PEPP was increased by €600 billion to a total of €1350 billion, slightly higher than most were expecting.”

“The horizon of the net purchases under the PEPP was extended to at least the end of June 2021 and in any case until the coronavirus crisis phase is over.”

“The maturing principal payments from PEPP will be reinvested until at least the end of 2022.”

“The financial markets showed mostly a positive response to the package. The news pushed bond yields lower and narrowed intra-Euro-area spreads, while equity prices and the EUR rose.”

Canada’s trade deficit widens more than anticipated in April

Statistics Canada announced on Thursday that Canada’s merchandise trade deficit stood at CAD3.25 billion in April, widening from a revised CAD1.53 billion gap in March (originally a CAD1.41-billion gap). That was the largest trade gap since February 2019.

Economists had expected a deficit of CAD2.36 billion.

According to the report, the country’s both imports and exports decreased drastically, due to production shutdowns in a number of manufacturing industries, falling energy product prices, the closure of many retail stores, and weaker demand due to physical distancing measures related to the COVID-19 pandemic.

Canada’s exports tumbled 29.7 percent m-o-m to $32.66 billion in April, the lowest level since January 2010, driven by lower exports of motor vehicles and parts (-82.9 percent m-o-m, the largest decline ever observed), energy products (-43.6 percent m-o-m, the largest decrease on record) and consumer goods (-14.5 percent m-o-m).

Meanwhile, imports plunged 25.1 percent m-o-m to $35.91 billion in April, a level not observed since February 2011, driven by declines in imports of motor vehicles and parts (-77.1 percent m-o-m, another unprecedented decline), energy products (-53.6 percent m-o-m) and consumer goods (-11.6 percent m-o-m, the largest decrease since 1988).

The U.S. Commerce Department reported on Thursday that U.S. the goods and services trade deficit widened to $49.4 billion in April from a revised $42.3 billion in the previous month (originally a gap of $44.4 billion). That was the biggest trade gap since August 2019.

Economists had expected a deficit of $49.0 billion.

According to the report, the April advance in the goods and services deficit reflected an increase in the goods deficit of $5.8 billion to $71.8 billion and a decline in the services surplus of $1.3 billion to $22.4 billion.

In April, exports of goods and services from the U.S. plunged 20.5 percent m-o-m to $151.3 billion (the lowest level since April 2010), while imports tumbled 13.7 percent m-o-m to $200.7 billion (the lowest level since July 2010), in part, due to the impact of COVID-19, as many businesses were operating at limited capacity or ceased operations completely, and the movement of travelers across borders was restricted.

Year-to-date, the goods and services deficit decreased 13.4 percent from the same period in 2019. Exports fell 9.5 percent, while imports dropped 10.2 percent.

Before the bell: S&P futures -0.54%, NASDAQ futures -0.23%

U.S. stock-index futures fell on Thursday, as investors took a breather after a recent rally fueled by optimism over near-term economic recovery from the coronavirus downturn. 

Global Stocks:

• Confident that good solution will be found with regard to German court ruling on ECB
• PEPP has prevented a downward spiral in financial markets
• Governing Council was a unanimous view that action had to be taken
• EU fiscal package provides important funding support
• ECB strongly welcomes the European Commission’s proposal

(company / ticker / price / change ($/%) / volume)

The revised data from the U.S. Labour Department showed on Thursday that nonfarm business sector labor productivity in the United States decreased 0.9 percent q-o-q in the first quarter of 2020, as output fell 6.5 percent q-o-q and hours worked dropped 5.6 percent q-o-q (seasonally adjusted). That was better than initial estimate of a drop of 2.5 percent q-o-q and economists’ forecast for a decline of 2.7 percent q-o-q. In the fourth quarter of 2019, labor productivity rose 1.2 percent q-o-q.

In y-o-y terms, the labor productivity rose 0.7 percent, reflecting no change in output and a 0.7-percent decline in hours worked.

Meanwhile, unit labor costs in the nonfarm business sector in the first quarter climbed 5.1 percent q-o-q compared to an initial estimate of a 4.8 percent q-o-q advance and a revised 2.2 percent q-o-q gain in the prior quarter (originally a 0.9 percent q-o-q advance). That was the biggest increase in labor costs since the first quarter of 2019.

Economists had forecast a 5.0 percent q-o-q surge in first-quarter unit labor costs.

Unit labor costs quarterly increase reflected a 4.2-percent q-o-q growth in compensation per hour and a 0.9-percent q-o-q decline in productivity.

Compared to the corresponding period of 2018, unit labor costs rose 1.9 percent.

Goldman Sachs (GS) downgraded to Hold from Buy at Deutsche Bank; target $227

• Economy has showed signs of bottoming out
• Q2 contraction will be unprecedented
• Prices to continue to be depressed by economy
• ECB determined to ensure needed degree of stimulus
• ECB will do everything possible within its mandate
• Some bottoming out of economy seen in May
• Economy expected to rebound in Q3
• Recovery speed and scale remain highly uncertain
• Level of economic activity and inflation outlook is downgraded due to uncertainty
• ECB sees 2020 GDP growth at -8.7% in baseline scenario vs +0.8% seen in March
• ECB sees 2021 GDP growth at 5.2 % vs. 1.3% seen in March
• ECB sees 2022 GDP growth at 3.3% vs. 1.4% seen in March
• Based on futures, inflation is expected to decline somewhat in coming months
• Over medium-term, weaker demand will put downward pressure on inflation
• ECB sees 2020 inflation at 0.3% vs 1.1% seen in March
• ECB sees 2021 inflation at 0.8% vs 1.4% seen in March
• ECB sees 2022 inflation at 1.3% vs 1.6% seen in March

The data from the Labor Department revealed on Thursday the number of applications for unemployment reduced last week to the lowest level since the U.S. economy went into lockdown made to fight the COVID-19 pandemic, but still remained high.

According to the report, the initial claims for unemployment benefits totaled 1,877,000 for the week ended May 30. That brings the number of job losses over the past eleven weeks (since the U.S. went into coronavirus lockdown in mid-March) to more than 42.6 million.

Economists had expected 1,800,000 new claims last week.

Claims for the prior week were revised upwardly to 2,126,000 from the initial estimate of 2,123,000.

Meanwhile, the four-week moving average of claims fell to 2,284,000 from a revised 2,608,750 in the previous week.

FXStreet reports that Credit Suisse’s economists notes that the NZD/USD upswing has come to a temporary halt just ahead of the pivotal 0.6448 high, which is expected to be broken allowing the kiwi to run toward net resistance at 0.6481.

“NZD/USD has come to a temporary pause just ahead of the important March 9 spike high at 0.6448. Although further near-term consolidation is likely, in particular as the daily RSI momentum remains in heavily overbought territory, we look for an eventual break higher in due course.” 

“We see resistance at the 78.6% retracement of the 2020 fall at 0.6481/88, ahead of a move back to the 50% retracement of the 2017/2020 fall at 0.6514, where we would expect to see fresh sellers at first. Above here could see momentum accelerate even further with resistance next at the 2014 downtrend at 0.6576, where we would expect to see another effort to cap.”

“Near-term support is seen at 0.6405, then 0.6366/63, ahead of the 200-day average at 0.6317, which ideally now holds.”

EUR rose against most other major currencies in the European session on Thursday after the European Central Bank (ECB) announced the outcomes of its latest monetary policy meeting. 

At the meeting, the ECB’s policymakers decided to leave its key interest rates unchanged and to boost its Pandemic Emergency Purchase Program by EUR600 billion to EUR1.35 trillion. The purchases under the PEPP will continue until at least the end of June 2021.

The announced increase in the size of the PEPP exceeded market expectations of around EUR500 billion, supporting the European single currency.

Now, market participants are awaiting the ECB’s press conference (due at 12:30 GMT), at which its president Christine Lagarde is expected to explain today’s monetary policy decisions.

The European Central Bank (ECB) remained its main refinancing rate unchanged at 0.00 percent on Thursday, as widely expected.

Its interest rates on the marginal lending facility and the deposit facility were also left unchanged at 0.25 percent and -0.50 percent, respectively.

In its policy statement, the ECB said:

• The envelope for the pandemic emergency purchase programme (PEPP) will be increased by EUR600 billion to a total of EUR1,350 billion;
• The purchases will continue to be conducted in a flexible manner over time, across asset classes and among jurisdictions;
• The horizon for net purchases under the PEPP will be extended to at least the end of June 2021;
• The maturing principal payments from securities purchased under the PEPP will be reinvested until at least the end of 2022;
• Net purchases under the asset purchase programme (APP) will continue at a monthly pace of €20 billion, together with the purchases under the additional €120 billion temporary envelope until the end of the year;
• Reinvestments of the principal payments from maturing securities purchased under the APP will continue, in full, for an extended period of time past the date when the Governing Council starts raising the key ECB interest rates;
• The Governing Council expects the key ECB interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within its projection horizon;
• The Governing Council continues to stand ready to adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner, in line with its commitment to symmetry.

FXStreet reports that Quek Ser Leang at UOB Group’s Global Economics & Markets Research assessed the prospects for the US Dollar Index (DXY).

“USD Index dropped sharply to a low of 98.27 in late March, rebounded quickly to 100.93 and then traded between these two levels for close to two months. USD Index cracked 98.27 last Friday (29 May) and the break was ‘confirmed’ when it closed below this level on Monday (01 Jun). The break of the solid support level is accompanied by a rapid pick-up in downward momentum and moving averages appear to have staged a ‘bearish crossover’. In other words, USD Index could continue to head lower from here.”

“The pace of any further USD Index decline could be relatively fast as the next support level of note is not until the rising trend-line on the weekly chart at 95.50 (level moving higher with time). That said, the current weakness is already entering oversold territory and for the next couple of months, the early March low of 94.65 is unlikely to come into picture. On the upside, the previous support at 98.27 is acting as a resistance now but the current negative outlook for USD Index is deemed as intact as long as the confluence of strong resistance levels at 99.30 is not taken out.”

FXStreet reports that the Credit Suisse analyst team suggests that EUR/USD will face 1.1287 and 1.1311 resistances before testing the 1.1367/77 major barrier – the 38.2% retracement of the 2018/2020 fall and potential downtrend from early 2018.

“With the market overbought a knee-jerk pullback should be allowed for, but we look for dips to be well supported with resistance seen next at 1.1287, ahead of the 78.6% retracement and ‘measured base objective’ at 1.1311.” 

“Big picture, the 38.2% retracement of the entire 2018/2020 bear trend and the long-term downtrend from 2018 at 1.1367/77 is seen as the main resistance test, which we expect to prove a much tougher barrier.”

“Support moves to 1.1184/82 initially, with 1.1166/54 needing to hold to keep the immediate risk higher. A break can see a setback to 1.1115/10, potentially the 13-day average at 1.1069/66, but with fresh buyers expected ahead of here.”

FXStreet reports that analysts at Charles Schwab note that, following a remarkable turnaround, the S&P 500 Index stands at 3,100 or 9% shy of its highest reading ever. The velocity of the up move could indicate a test of the 3400 level is on the cards.

“Prices have risen out of a sideways consolidation period and into resistance at the 78.60% Fibonacci price of 3135. Prices could begin to stall out with the potential for another sideways consolidation period between the 78.06% resistance and 61.80% support.”

“A logical upside target, should prices breakout, could be near all-time highs around 3400. The recent trend is clearly bullish, but the Stochastic RSI indicates an overbought condition being pegged at 100%.”

“Support comes in around 2930 but rising moving averages around the 3000 psychological level could serve as potential support areas as well.”

FXStreet reports that analysts at Credit Suisse apprise that USD/JPY goes on rallying with resistance seen next at 109.39/52 and with the ‘measured base objective’ at 110.20. 

“With the 50% retracement of the March/May fall at 108.85 cleared with ease we maintain our bullish bias with resistance next at 109.39/52 – the April high and 61.8% retracement – with the ‘measured base objective’ seen at 110.20.”

“An overshoot to the 78.6% retracement at 110.49 should be allowed for, but we look for this to cap at first.”

“Support is seen at 108.83/80 initially, with the 200-day average and yesterday’s low at 108.49/39 ideally holding to keep the immediate risk higher.”

• Sticks to current 2020 forecast of 6.3% decline in GDP
  
• Expects the economy only to return back to pre-crisis levels in the second half of 2022

• But even if it is decided, it will be the right thing to do at the time
• The rush for cash during lockdown was the "biggest test of core market functioning and resilience" since global financial crisis
• Markets could come under strain again, if there is another leg to coronavirus global infection cycle, or if economic data is persistently worse-than-expected

FXStreet reports that according to FX Strategists at UOB Group, USD/CNH could intensify the downside if 7.0850 is cleared in the next weeks.

24-hour view: “USD traded between 7.0890 and 7.1274 yesterday, higher than our expected consolidation range of 7.0850/7.1250. The movement is still viewed as an on-going consolidation phase even though the slightly firmed underlying tone suggests a higher trading range of 7.1100/7.1350.”

Next 1-3 weeks: “The pace and extent of the pull-back from last week’s 7.1966 high came as a surprise. For now, we continue to hold the view that USD is ‘trading sideways’ but if USD closes below 7.0850, it could signal the start of a deeper decline in USD. At this stage, the prospect for such a move is not that high but it would increase unless USD can move above 7.1500 within these few days.”

FXStreet reports that strategists at ANZ Bank expect gold to hit a record high in the second half of 2020 due to a challenging economic environment though, an increase in risk appetite has been a strengthening headwind for the yellow metal.

“A kick-start to another rally in the gold price remains elusive. The market’s confidence that the most acute stage of the pandemic has passed in many countries has seen risk appetite improve. With investors now betting stimulus measures will bridge the gap to more normal growth.” 

“We remain bullish over the medium-term. The macro backdrop is challenging, despite market confidence in the trend towards normalised growth. The expansion of central banks’ balance sheets shows no sign of abating, while geopolitical tensions escalate.” 

“We think those investors who continue to raise their allocation to precious metals are sitting on a gold mine.”

According to the report from Eurostat, in April 2020, the COVID-19 containment measures widely introduced by Member States again had a significant impact on retail trade, as the seasonally adjusted volume of retail trade decreased by 11.7% in the euro area and by 11.1% in the EU, compared with March 2020. Economists had expected a 15% decrease in the euro area. In March 2020, the retail trade volume decreased by 11.1% in the euro area and by 10.1% in the EU. In April 2020 compared with April 2019, the calendar adjusted retail sales index decreased by 19.6% in the euro area and by 18.0% in the EU.

In the euro area in April 2020, compared with March 2020, the volume of retail trade decreased by 27.7% for automotive fuels, by 17.0% for non-food products and by 5.5% for food, drinks and tobacco. In the EU, the volume of retail trade decreased by 25.0% for automotive fuels, by 14.7% for non-food products and by 5.9% for food, drinks and tobacco. It can be noted that the volume of retail trade by mail order and internet rose by 10.9% in the euro area and by 11.9% in the EU.

In the euro area in April 2020, compared with April 2019, the volume of retail trade decreased by 46.9% for automotive fuels and by 33.6% for non-food products while food, drinks and tobacco increased by 2.5%. In the EU, the volume of retail trade decreased by 42.6% for automotive fuels and by 29.7% for non-food products while food, drinks and tobacco increased by 1.4%.

According to the report from IHS Markit/CIPS, UK construction companies indicated a sustained downturn in business activity during May. The latest survey highlighted a softer pace of decline than the record slump seen in the previous month, largely reflecting a gradual reopening of construction sites as lockdown measures were eased in England.

At 28.9 in May, the headline seasonally adjusted UK Construction Total Activity Index picked up from 8.2 in April, but was the second lowest since February 2009. Any figure below 50.0 indicates an overall decline in output.

Around 64% of the survey panel reported a drop in construction activity during May, while only 21% signalled an expansion. Where growth was reported, this was mostly attributed to a limited return to work on site following shutdowns in April.

Construction companies recording a drop in activity during May often cited furloughed staff across the supply chain, as well as prolonged business closures in other parts of the economy and disruptions from social distancing measures on existing projects. Residential work was the most resilient category in May (index at 30.9), followed by civil engineering (28.6). Commercial building also fell at a slower pace during the latest survey period, but was the worst performing broad area of construction (26.2). 

May data also indicated a rapid drop in new orders received by UK construction companies, which was almost exclusively attributed to the coronavirus disease 2019 (COVID-19) pandemic. Survey respondents commented on a sharp decline in demand for new construction projects, although some noted that the reopening of sites had helped to alleviate the scale of the downturn in order books.

Looking ahead, construction companies remain downbeat about their prospects for the next 12 months, with sentiment holding close to April's low. Recession worries and fears of postponements to new projects were commonly reported in May.

Reuters reports that Japan's latest stimulus package aimed at softening the economic blow from the coronavirus pandemic is estimated to boost real gross domestic product by about 2.0%, Economy Minister Yasutoshi Nishimura said on Thursday.

Japan's government last month approved a new $1.1 trillion stimulus package that includes significant direct spending, as the hit to economic activity from the virus threatens to push the economy deeper into recession.

The 117 trillion yen stimulus followed another package of a similar magnitude rolled out in April. The government estimated the lift to real GDP from recent stimulus measures, including the latest package, to be about 6.4%.

FXStreet reports that USD/CHF is experiencing a very small near-term rebound which is expected to stop at the 0.9720 downtrend and turn the attention to the downside, per Commerzbank. 

“USD/CHF is currently holding on a closing basis the 0.9590 May 1 low. We suspect that rallies are likely to struggle 0.9650-0.9720. Below 0.9575 lies the 0.9501 support and 0.9457, the 61.8% Fibonacci retracement.”

“Rallies are expected to remain offered below 0.9720, the short-term downtrend. The topside is reinforced by the 200-day ma at 0.9778. We note the sell signal on the DMI Index and this adds weight to our negative bias.”

According to the report from IHS Markit, the Eurozone Construction Total Activity Index rose to 39.5 in May, up from a record low of 15.1 in April. The latest reading nevertheless still indicated a steep decline in construction activity across the eurozone. 

Survey data showed Germany and France recorded a third straight month of decreasing construction output. By contrast, Italy posted a marginal rise in construction activity.

Home building activity across the eurozone fell further in May, though the rate of decline eased considerably from April's record. The downturn in housing construction projects was led by France and Germany. By contrast, Italy posted a rise in home building activity following a two-month period of severe declines.

Work undertaken on commercial construction projects in the eurozone likewise declined further midway through the second quarter. That said, the pace of contraction slowed markedly from a record decrease in April, though still remained steep overall.

Meanwhile, eurozone civil engineering activity fell further in May, extending the current sequence of contractions to ten months. Overall, the rate of decline was substantial, but notably slower than April's record. 

New business received by eurozone construction firms fell substantially further in May, though the rate of decline eased considerably from a survey record set in April. Anecdotal evidence suggested that delays in tenders and suspensions of construction activity amid the COVID-19 pandemic continued to dampen demand.

Business expectations among eurozone building companies remained negative in May, as reflected by the Future Activity Index coming in below the neutral 50.0 level for a third straight month. Concerns were linked to the longer-term impact of the COVID-19 pandemic on construction activity. 

FXStreet reports that the kiwi is driven by reopening and rebounding data as the NZD/USD pair saw a blistering performance yesterday fuelled by less-worse-than-expected US jobs data. Economists at ANZ Bank are looking for a break of 0.6440 to lead toward the 0.6500 level.

“It’s all about the ‘rebound’ side of the impulse now that economies are reopening, and that’s a situation that could easily extend into Q3.”

“In short, there is a lot of good news to get through before the longer-term realities start to bite; NZD will remain elevated in that environment.”

“Technically, NZD is very strong. A break of 0.6440 brings 0.6500 into view, then it’s blue sky till 0.6765 (the Jan 2020 high).”

In today's Asian trading, the euro declined against the US dollar ahead of the European Central Bank (ECB) meeting.

Many economists believe that ECB President Christine Lagarde will announce at today's meeting an expansion of the 750 billion Euro Pandemic Emergency Purchase program (PEPP), launched in March. Analysts expect an increase in the volume of the program by 500 billion euros. Thus, the volume of all asset repurchase programs this year will reach a record 1.6 trillion euros.

In addition to the actions of the ECB, the governments of the Euro zone countries are developing fiscal incentives to launch economic growth. The European Commission plans to allocate grants and loans of 750 billion euros, which will primarily be sent to the countries most affected by the pandemic.

The ECB has in recent months called on governments to lead efforts to support the economy. Lagarde is likely to again advocate for increased budget spending and provide guarantees of low borrowing costs.

The ICE Dollar index, which shows the value of the dollar against six major world currencies, rose by 0.27% relative to the previous day.

According to the report from Federal Statistical Office (FSO), the consumer price index (CPI) remained stable in May 2020 compared with the previous month, remaining at 101.3 points (December 2015 = 100). Inflation was –1.3% compared with the same month of the previous year. 

The stability of the index compared with the previous month is the result of opposing trends that counterbalanced each other overall. Prices for housing rental, international package holidays and those for stone fruits increased. In contrast, prices for fuel and hotel accommodation decreased.

In May 2020, the Swiss Harmonised Index of Consumer Prices (HICP) stood at 100.65 points (base 2015 = 100). This corresponds to a rate of change of –0.2% compared with the previous month and of –1.0% compared with the same month the previous year. Due to the effects of the pandemic, the same missing price imputation techniques used for the CPI were introduced for the HICP. The HICP is a supplementary indicator for inflation based on a harmonised method across EU member countries. It enables inflation in Switzerland to be compared with that of European countries.

FXStreet reports that FX Strategists at UOB Group noted EUR/USD could extend the move up to the 1.1285 level in the next weeks.

24-hour view: “We highlighted yesterday that ‘the tenacious rally could extend to 1.1235 first before a pull-back can be expected’. The subsequent advance in EUR exceeded our expectation as it rose to an overnight high of 1.1256 before settling on a firm note at 1.1232 (+0.56%). Conditions remain severely overbought but there is no clear sign that the rally in EUR is ready to take a breather. From here, only a breach of 1.1180 (minor support is at 1.1200) would indicate that the current upward pressure has eased. Meanwhile, EUR could grind higher even though the major resistance at 1.1285 is likely out of reach.”

Next 1-3 weeks: “EUR continues with its relentless rally as it registered seven consecutive days of higher high, higher low and higher close. While there is no indication just yet that the current rally is about to end soon, such massive and rapid rally without a ‘pause’ is not common and it is left to be seen if EUR could continue to maintain the current pace of its advance. Overall, only a break of 1.1140 (‘strong support’ level was at 1.1095 yesterday) would indicate that the current positive phase in EUR has run its course. Until then, further EUR strength towards 1.1285 is not ruled out but the prospect for extension to the next resistance at 1.1330 this time round is not high for now.”

eFXdata reports that CIBC Research discusses its reaction to BoC policy decision. 

"Stephen Poloz didn't make any waves in his final monetary policy decision, with only a scattering of adjustments to scale back the central bank's market operations. The Bank left the overnight rate at what it deems its effective lower bound of 0.25%, and made no changes to its large-scale asset purchase program of Government of Canada bonds.The only change came via reductions in the frequency of operations for repo and bankers' acceptances, as functioning in those markets have improved," 

"That said, the Bank went out of its way to state that he endorsed the decision. With Poloz not making any major changes today, it might not be too long until Macklem puts his stamp on policy, with a lot of work still left to be done to bring the economy back to life," CIBC adds. 

• CNBC reports that public health specialists are reviving conversations about a potential vaccine for Covid-19, as mass protests following the death of George Floyd while being subdued by police continue in many U.S. cities. 

• White House health advisor Dr. Anthony Fauci said Tuesday he’s concerned about the “durability” of a potential coronavirus vaccine, adding that there’s a chance it might not provide long-term immunity. And former Food and Drug Administration Commissioner Dr. Scott Gottlieb told Wednesday that any effective vaccine will likely still be seasonal. 

• Global cases: More than 6.44 million

• Global deaths: At least 382,451

• U.S. cases: More than 1.84 million

• U.S. deaths: At least 106,694

EUR/USD

Resistance levels (open interest**, contracts)

$1.1319 (2598)

$1.1287 (1656)

$1.1266 (2068)

Price at time of writing this review: $1.1216

Support levels (open interest**, contracts):

$1.1175 (867)

$1.1138 (709)

$1.1095 (1230)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date June, 5 is 100870 contracts (according to data from June, 3) with the maximum number of contracts with strike price $1,0700 (5296);

GBP/USD

Resistance levels (open interest**, contracts)

$1.2707 (1597)

$1.2632 (693)

$1.2599 (1745)

Price at time of writing this review: $1.2536

Support levels (open interest**, contracts):

$1.2490 (370)

$1.2446 (479)

$1.2349 (464)

Comments:

- Overall open interest on the CALL options with the expiration date June, 5 is 24396 contracts, with the maximum number of contracts with strike price $1,3500 (3420);

- Overall open interest on the PUT options with the expiration date June, 5 is 30395 contracts, with the maximum number of contracts with strike price $1,3500 (3095);

- The ratio of PUT/CALL was 1.25 versus 1.23 from the previous trading day according to data from June, 3

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.