Weekly Recap 20-24 July

Tensions between the world’s two largest economies, the United States, and China continues to increase next to increase in the number of new cases of Covid-19, particularly in the United States, all this cast a shadow over the markets as President Trump took some decisions related to China with accusations that they were aware of the existence of the virus earlier.

Markets were heavily affected over the past week due to these events, especially since there was no significant driver events, but global stock markets witnessed volatile moves, to close the week on a decline with gold jumping to historical levels and the dollar falling for nearly two-year lows.

The US currency reached 94.43, the low of September 21, 2018, during last week’s trading; the dollar fell from 96.00 levels recorded on July 16. As for the tensions between the United States and China, the United States asked to shut down its consulate in Houston and given it until last Friday. China responded by closing the US consulate in Chengdu.

The European currency rose slightly to 1.1631 against the US dollar, while the dollar fell against the yen 1.1% to 105.700 and fell more than 0.3% against the sterling to 1.2785 during Friday’s trading.

Stock markets

United State

The Dow Jones industrials fell 0.7% to 26469.8 and recorded weekly losses of 0.8%, the S&P fell 0.6%, recording 3215.6 points, to drop by 0.3% during the past week, with the NASDAQ composite index dropping 0.9% to 10363.1, recording weekly losses of 1.3 %

Europe

European indexes also fell, the Stoxx 600 Index dropping 1.7% to 367.2, recording weekly losses of 1.5%, with FTSE index dropping 1.4% at 6123.8, retreating during the week by 2.6%, and the German DAX fell 2% to 12,838, recording a weekly loss of 0.6%, French CAC index also fell 1.5% to 4956.4, marking a weekly loss of 2.35.

Asia

The opposite was exact for Asian stocks, with gains recorded over the past week, Nikkei rising 0.2% to 22,751.61, recording gains of 55.19. The data showed a rise in manufacturing activity in Japan. Still, it remains within the contraction zone for July, which is the contraction for the fifth consecutive month, indicating that the economy was affected by the Covid 19 crisis and hopes for a rapid recovery faded.

Japan’s manufacturing PMI hit 42.6 points, compared to 40.1 points the previous month.

Oil

US crude rose by 1.7%; Baker Hughes data revealed an increase Rig count by one.

The US Energy Information Administration announced on Wednesday that oil stocks in the United States increased by 4.9 million barrels during the week ending July 17 to reach 536.6 million barrels.

Data released by the US Energy Information Administration revealed that natural gas stocks in the United States increased by 37 Bcf in the week ending July 17 to reach 3215 Bcf

Gold

Last week was the week of the victory of gold, as it made historic gains to break the $ 1900 mark for the first time since 2011, to record the highest level on Friday. Gold has received support from tensions between the US and China, as well as the increasing numbers of Covid-19 cases. Gold gained nearly 5%, closing the week at $ 1902.02 an ounce.

Currencies

The single currency witnessed positive moves, rising 0.52% to $ 1.1656, the highest level since September 21, 2018. European Union leaders reached an agreement on the region’s massive recovery fund to tackle the consequences of Covid-19 in the bloc. The European currency rose 2% on a weekly basis against the US dollar.

The Japanese yen rose 0.8% last week to 106.14 from 107.02 recorded the previous week.

The British Pound rose to 0.4% to exceed $ 1.28 for the first time in four months, while it increased by 1.9% on a weekly basis.