Second COVID wave, key PMI data to impact markets as UK preps to reopen restaurants
Investors will be watching to see what UK Prime Minister Boris Johnson announces regarding guidelines for the hospitality sector including pubs and restaurants to reopen in July. He is expected to halve the two-metre social distancing rule which the industry has heavily criticised.
This would give the economy a much needed boost and will follow from positive news that the UK's virus alert level has been downgraded from four to three.
However in the US, new daily cases on Friday exceeded 30,000 for the first time in seven weeks.
Analysts at ING have said second COVID-19 waves are set to keep hitting investor sentiment worldwide while IHS Markit said upcoming data will be scrutinised eagerly for clues as to the length and depth of recessions caused by the pandemic, most notably the flash PMI updates for the US and Europe.
Other news investors will be keeping an eye on:
China's grip on Hong Kong tightens as it plans special bureau in city to defend 'national security'
US prosecutor who has investigated Trump lawyer refuses to resign
Britain: New rules for restaurants
The two-metre social distancing rule in England looks likely to be relaxed after Chancellor Rishi Sunak said the prime minister’s review “will make an enormous difference” to businesses.
Boris Johnson is expected to make an announcement next week on pubs, cafes, restaurants and hotels – with their reopening in England an ambition from 4 July to start reviving the economy. Shops have already opened.
Manufacturing, composite and services PMI data for June is expected June 23.
Europe: EU-China summit
Hong Kong is sure to be top priority at the EU-China summit on 22 June, to be held via video conference.
The European Parliament has said it recommends that EU file a case before the International Court of Justice, if the new national security law for Hong Kong is applied. The law has been criticised by pro-democracy politicians, who believe it will tighten Beijing’s hold on the city.
Key PMI data for June is expected 23 June and Germany’s GfK consumer confidence for July is set to be out 25 June.
US: Jobless claims
Weekly jobless claims data will be published 25 June. ING analysts said “our team notes a slight slowing in improvement in the employment situation – thus Thursday’s initial and continued claims will still be scrutinised.”
A slew of key data including May existing home sales, (22 June) new home sales (23 June) May durable goods orders (25 June) and a final reading of June consumer sentiment (26 June).