China's foreign trade surplus with the US reached a historic high

On Thursday, prices continued to rise on the US stock market

The Chinese authorities said that they had not yet discussed the issue of new foreign trade duties with the US. Market participants do not exclude that China can make any concessions.

In June 2018, the China's foreign trade surplus with the US reached a historic high and amounted to $29 billion. In the first half of the year, it reached $133.8 billion. Let us recall that the US president is going to raise duties on almost all Chinese goods supplied to the United States, with a total value of $500 billion per year. The increase will be nearly 10%, which will not completely stop imports. Nevertheless, the US companies will gain an advantage, which contributed to the significant increase in the US stock market. Boeing and Caterpillar stocks, which were previously among the top losers, rose by more than 1% yesterday. Facebook, Microsoft and Amazon stocks have updated historical highs. The consumer confidence index by the University of Michigan for July will be published today at 16:00 CET in the US. Investors will mainly focus on the indicators of quarterly reports by the largest US banks: JPMorgan Chase, Wells Fargo and Citigroup.

European stock indices rose following US stock indices, and the euro fell

The telecommunications sector was among the top gainers (+ 2.4%) thanks to good corporate news.

American media group Comcast offered to buy out British TV-provider Sky for $34 billion. Eutelsat, Intelsat and SES companies can create a joint project to develop a 5G mobile network in the US. The industrial production growth in the Eurozone for May also contributed to the general increase in European stock indices. The euro exchange rate fell after Donald Trump’s statement that European countries should increase defense spending first to 2% of GDP and then to 4%. The increase in US inflation in June contributed to the drop of the euro against the US dollar. This increases the probability of a Fed rate hike. Today, no significant economic statistics are expected in the Eurozone.

Nikkei demonstrated a strong growth for the second consecutive day

The Japanese stock index Nikkei demonstrated a maximum weekly growth of 3.7% since the end of March of the current year. This was contributed by the continuous weakening of the yen and good corporate news. Fast Retailing, the operator of the Uniqlo clothing chain, reported an increase in operating profit by 37% and its stock prices rose by 7%. Amid the increase in US high-tech companies, Japanese Advantest Corp and Kyocera Corp added more than 2%. The yen collapsed to a 6-month low against the US dollar amid China's "silence" regarding the new US duties. Previously, investors considered the Japanese currency as a "safe haven" in the trade war between the US and China.

Soybean prices continue to decline, and corn prices are trying to rise

Since the beginning of June, soybean prices have already fallen by 20%. In its monthly report, the U.S. Agriculture Department (USDA) raised the forecast for commercial bean stocks at the end of the 2018/19 agricultural season from 385 million bushels to a historic high of 580 million bushels. The export forecast decreased by 250 million bushels to 2.04 billion bushels. The USDA raised the forecast for soybean crop in the US to 4.31 billion bushels.

Corn prices slightly increased after the publication of the monthly USDA report for July. The crop forecast was raised to 14.23 billion bushels from 14.04 billion in June. However, the ministry lowered the estimate of US stocks at the end of the 2018/19 season to 1.552 billion bushels from 1.577 billion and raised the corn export forecast by 125 million bushels to 2.225 billion. The USDA also lowered its stock forecast for the end of the 2017/18 season, also due to an increase in exports.