TOPICS COVERED IN THIS MARKET BRIEFING:

• European stock markets end in the red
• On Wall Street, the S&P 500 sets an all-time record
• Chart of the day - EUR/USD: End of consolidation

EUROPEAN STOCK MARKETS END IN THE RED

European stock markets ended lower on Tuesday, with the trend reversing shortly after the opening of Wall Street despite record highs in the Standard & Poor's 500 and Nasdaq Composite indices, all in reduced volumes due to summer vacations.

The session remained fairly flat against a backdrop of fears about the coronavirus and its consequences, such as the border closures that could continue. The decline remains very measured compared to the risk that we run around the world.

For six months and the outbreak of the crisis, each day brings its share of bad news on the front of the pandemic and its health and economic consequences.

The stock market session was also marked by a clear drop in the dollar, at its lowest level in more than two years, against the euro.

Thus, the CAC 40 index lost 0.68% to 4,938.06 points. The Footsie lost 0.83% and the DAX 30 was down 0.30%.

ON WALL STREET, THE S&P 500 SET AN ALL-TIME RECORD

The S&P 500 and the Nasdaq hit records in session and at the close on Tuesday, the U.S. markets returning to levels prior to the coronavirus crisis after the brutal losses that shook the markets. The index had however collapsed by more than 30% between that date and March 23.

The severe restriction measures imposed by some states in the face of the galloping advance of Covid-19 in certain areas of the United States, particularly in New York, led to fears of a plunge in economic activity and corporate profits and a surge in unemployment.

But since then, the government has stepped in with its vast support plan for households, businesses and local authorities, which has helped limit the damage.

Billions of dollars of fiscal and monetary stimulus have since pulled Wall Street higher. Technology stocks were seen by investors as the safest way out of the crisis.

However, fears persist due to high tensions between the U.S. and China and the inability of lawmakers to agree on a new economic stimulus package and concerns about Covid-19.

As a result, the Dow Jones lost 0.31% to 27,844.91 points. The Nasdaq advanced 0.73% and the S&P-500 gained 0.23%.

Other financial market news

• FOREX

While Wall Street has set a string of records, the dollar has depreciated for the fifth straight session and is now at its lowest level in over two years against a basket of reference currencies (-0.52%).

The greenback continues to suffer from the ultra-accommodating policy of the Federal Reserve and the widening of U.S. deficits, two factors that support the opposite of stocks.

• Oil

The oil markets have also fallen into the red during the session, caught up in questions about the evolution of demand.

Brent crude lost 0.07% to $45.34 a barrel and U.S. light crude WTI 0.65% to $42.61.

Economic Calendar of the Day :

CHART OF THE DAY - EUR/USD: END OF CONSOLIDATION

Several factors have been weighing on the greenback for several weeks. The first source of concern for economists is the U.S. debt, which was already very high before the pandemic, and which continues to rise.Finally, the fall in interest rates and the abundance of liquidity from the Fed have also weakened the US currency.

Graphically, the euro was consolidating in a range between $1.1875 and $1.1710, so the exit from the top opens the way for new bullish prospects. The pair is expected to resume its upward path and head towards the next target of $1.2040. The market is not showing any signs of weakness or loss of momentum, so the buying flow remains impactful for now.

However, investors will be scrutinizing the minutes of the Federal Reserve's July monetary meeting, which will be released today at 8:00 pm. Jerome Powell's announcements are likely to create volatility across the dollar pairs.