Markets preview 3.7.2020

The Asian session continued in the risk-on sentiment, and equity futures rose half a percent, heading into the European session. The greenback was trading flat against most of the major currencies, with the EURUSD pair seen near 1.1240, and the USDJPY pair was unchanged at 107.50.

Later in the day, we will see the revisions of the EU PMI's, which could reinforce the positive mood for today.

However, US traders are off today, celebrating Independence Day, which is the biggest holiday in the USA. Therefore, no traders = no liquidity = no volatility = no nothing.

Yesterday's US labor market data surprised on the upside as the US economy added a whopping - record - 4.767 million jobs, crushing expectations of 3.058 million, and indicating that the V-shaped recovery is well on track. Equities surged after this news, but since the US opening bell, they have been drifting lower and collapsed into the close. 

The COVID situation in the USA is getting worse as the country reported more than 50k new daily cases, with many more cases undetected. At this rate, the US could reach hed immunity in some months, assuming there are 10times more undetected cases than the detected ones. 

The virus situation is making investors nervous, and some cyclical sectors are underperforming the Nasdaq index - which is very obvious when we compare the Nasdaq index to the Dow. This difference is likely to continue until cases in the US start to go down significantly. 
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