Monday Malaise, EUR Weakness
|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
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.