Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

European shares rebound from lows, euro set for best month in a decade

EconomyJul 31, 2020 08:37AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: Security guard wearing a face mask walks past the Bund Financial Bull statue on The Bund in Shanghai 2/2

By Ritvik Carvalho

LONDON (Reuters) - European shares recovered from their lowest levels in a month on Friday, as investors looked past a severe economic contraction in the euro zone and on to company earnings, while the euro reached its highest in more than two years, set for its best month in a decade.

The euro zone's economy recorded its deepest contraction on record in the second quarter, preliminary estimates showed, but inflation unexpectedly ticked up in July.

Gross domestic product in the bloc shrank by 12.1% from the previous quarter, the European Union's statistics office, Eurostat, said in its flash estimates. The decline coincided with coronavirus lockdowns, which in many euro zone countries began to ease only in May.

The pan-European STOXX 600 (STOXX) rose 0.6%, though it was on course to end the month flat or lower. Technology shares (SX8P) led the rally, rising over 2% after Wall Street's tech giants, Apple (O:AAPL), Amazon (O:AMZN) and Facebook (O:FB), reported forecast-beating results overnight.

MSCI's All Country World Index, which tracks shares across 49 countries, was down 0.04% on the day. (MIWD00000PUS)

"Germany’s (-10.1%) and France’s ( -13.8%) numbers have already shaped expectations around the magnitude of the 2Q slump in the aggregated eurozone economy," ING strategists said in a note to clients.

"Markets will therefore focus on assessing the slowdown in the Italian and Spanish economies, which were among the first and worst-hit countries in the pandemic."

They added the euro could hit $1.20 within the next few days. The single currency passed $1.19 on Friday, though it fell back below the handle by midday in London. (EUR=EBS)

The dollar was set for its worst month in a decade against a basket of currencies, as abysmal economic data for the second quarter and rising global COVID-19 cases darkened the mood. The dollar index (=USD) gained 0.2% on Friday to 93.011 (DXY) [FRX/]

Expectations the U.S. Federal Reserve will maintain its ultra-loose monetary policy for years have contributed to a depressed dollar.

U.S. gross domestic product plunged 32.9% in the second quarter, the biggest decline on record. Jobless claims rose last week, another sign the economic recovery has slowed.

Those figures overshadowed positive manufacturing data from China and Japan. China's official Purchasing Manager's Index data showed that factory activity grew in July for a fifth straight month and at a faster pace, defying expectations of a slowdown. Japan's industrial output snapped four months of declines in June.

Earlier in Asia, shares turned lower on Friday amid the economic data from the United States and rising global COVID-19 cases. After rising in early trade, MSCI's broadest index of Asian shares outside Japan (MIAPJ0000PUS) turned lower. It was last down 0.3%.

Australian shares (AXJO) were down 2.04% and Seoul's Kospi (KS11) ticked 0.64% lower. Japan's Nikkei (N225) dropped 2.82% as a stronger yen weighed on exporters.

Chinese blue chips (CSI300) were last up 0.35% in a session that swung repeatedly between gains and losses.

Futures continued to point to a higher open on Wall Street on Friday. Apple (O:AAPL), Amazon (O:AMZN), Facebook (O:FB) and Alphabet (O:GOOGL) reported quarterly earnings on the same day for the first time ever, all topping Wall Street estimates.

"All of them punched the lights out with respect to their earnings numbers," said National Australia Bank (OTC:NABZY) strategist Ray Attrill.

E-mini futures for the S&P 500 (ESc1) rose 0.2% and Nasdaq futures gained over 1%.

U.S. stock markets, oil prices and the dollar slid on Thursday as the data underscored the economic impact of the coronavirus and U.S. President Donald Trump raised the possibility of delaying the November election.

On Wall Street, the Dow Jones Industrial Average (DJI) fell 0.85%, the S&P 500 (SPX) lost 0.38% and the Nasdaq Composite (IXIC) added 0.43%.

Crude oil recovered from an overnight slump, with global benchmark Brent crude (LCOc1) rising 0.7% to 43.25 a barrel. U.S. light crude added 0.5% to $40.21 per barrel. (CLc1)

Gold also turned higher, with spot gold trading 0.64% higher at $1,972.19 per ounce, just short of record highs.

U.S. benchmark 10-year Treasury notes (US10YT=RR) yielded 0.5363%. The two-year yield (US2YT=RR) touched 0.1152% compared with a U.S. close of 0.121%.

Italian 10-year bond yields were set for their biggest monthly drop since January on Friday, boosted by the recovery fund agreed by the European Union last week.

European shares rebound from lows, euro set for best month in a decade
 

Related Articles

American Airlines sees minor impact after 5G rollout
American Airlines sees minor impact after 5G rollout By Reuters - Jan 19, 2022

WASHINGTON (Reuters) - American Airlines (NASDAQ:AAL) said on Wednesday it had seen some delays and four cancellations as a result of new 5G service and some additional impact to...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (6)
katya litski
katya litski Mar 07, 2021 9:24PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
why is this in my news
Dietmar Stahl
Dietmar Stahl Jul 31, 2020 1:04AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Euro at Export damaging high
DnaaeR Rhmwwioa
DnaaeR Rhmwwioa Jul 31, 2020 12:45AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Good morning, here's to a wonderful day.. start something New
Sajjad Hussain
Sajjad Hussain Jul 31, 2020 12:38AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
usd have chance up ??
DnaaeR Rhmwwioa
DnaaeR Rhmwwioa Jul 31, 2020 12:36AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Stay at home safe and earn money at home by trading marketplace safe.
perplexed76 .
perplexed76 . Jul 31, 2020 12:23AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
the rally of hopes was unexpectedly suspended by really bad economy news. S&P plummeted - 0.38%.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email