Monday Malaise, EUR Weakness

Peter A Rosenstreich Swissquote Bank Ltd

Today, the market activity will be limited due to the US holidays. Bitcoin rallied to $8’700 on the back of rising concerns over US and China trade tensions. Asia shares were mixed, yet Shanghai fell on Chinas industrial firms fell in April, highlight slowing growth. Rhetoric between the two global superpowers has ramped up a decrease in the likelihood that a deal is in reach. The longer a standoff last the higher the probability of further escalations. Should Trump-Xi meeting at G20 fail to trigger a new round of high-level discussion, USD/CNH could attempt new highs as market sentiment sinks near a long-term deadlock.

The EU elections results saw the populist parties largely failed to chalk up a kill shot. Liberals and Green could be viewed as the winner of these elections. German and Greek spread widened further as Greek ruling party Syriza had a weak showing. In regards to the UK, the EU election failed to send a clear signal for Brexit or UK general election. After UK Prime Minister Theresa May resignation on Friday Brexit uncertainty is at a new high in our view. Sterling downside sell-off is far from over, as the politician, chaos in the UK has just started. In broader terms, the EU 28 country political system is extremely fragments making moving forward in a coordinated effect difficult. EURUSD has been marginal selling pressure down to 1.1195 on long-term expectations. This is ironic, since US-China trade feud opens a significant window for EU business. Moving forward we anticipate that China will take a harsher tone leaning towards a protracted trade war and additional retaliatory tariffs.

Stay on top of the markets with Swissquote’s News & Analysis

Author

Peter A Rosenstreich

Swissquote Bank Ltd

Peter Rosenstreich is Swissquote Bank’s Head of Market Strategy and manages the global strategy desk; he has held various positions in several banking institutions in the United States, Europe & Asia.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.