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Tradeview’s Daily Digest – 4th June

ECB Extends PEPP by a further year

The ECB kept interest rates unchanged on Thursday as many had expected. However in a move which stunned markets, it announced that it would keep the pandemic emergency purchasing programme running for a further year. 

The extension will now continue until June 2021, whilst also increasing the programme by €600 billion meaning the total stimulus now sits at €1.35 trillion.

EURUSD was one of the main movers from the news, climbing from 1.1196 – 1.1363.

U.S. Initial Jobless claims above estimates, but drop again

Initial jobless claims of 1.88 million for the week ending May 30th, were above median estimates of 1.83 million, but below 2 million for the first time since mid-March.  In recent weeks claims have slowly declined since hitting what now looks to be the peak of 7 million in late March.

This decline along with the ADP private sector employment change yesterday, a decrease of 2.76 million jobs, far better than the 8.75 million loss expected, has boosted hopes of a rapid return to work in the U.S. post lockdowns.

Markets now look towards tomorrow’s NFP report, for further confirmation of this.

EBay shares hit record high

On Thursday, EBay raised its revenue and profit forecasts. This came after COVID-19 lockdowns have boosted the online retailer’s sales. Shares of the online retailer rose as much as 11.6% to create a new all-time high of $51.88.

NASDAQ is back

The NASDAQ-100 has now erased all of its Covid-19 related losses and the broader NASDAQ Composite Index is also closing in on its former high, trading up to 9,716 in the morning before pulling back to 9,650 later in the day.

“In investing, what is comfortable is rarely profitable.”

Robert Arnott

Biggest Bull

EURUSD: EURUSD broke the 1.124 resistance on Thursday after the ECb announced an extension to its PEPP programme. The rate now stands at its highest since March 13th. 

Biggest Bear

USDZAR: The selloff in USDZAR continued on Thursday, with the 10 day and 25 day moving averages continuing to decline. The pairing now sits at 16.84 which looks to be a support level.