The Day So Far…
The negative sentiment that weighed on the market last night has remained this morning as renewed concerns over the implementation of key tax reforms in the US resurfaced amid rumours of the resignation of White House Economic Adviser Gary Cohn. Although this was later denied the tragic event that unfolded in Barcelona last night meant that sentiment remains fragile for the time being. Due to these events Gold futures have managed to surmount $1,300/oz, YTD highs, with the yellow metal now up some $40 since the renewed tensions on the Korean Peninsula returned and now amid on-going and persistent pressure on President Trump. Elsewhere, a moderate flight-to-quality play is evident in the other assets this morning with a firmer JPY and T-notes holding onto the gains seen yesterday afternoon.
The Day Ahead…
Looking at the day ahead it is worth noting the US President will be participating in a briefing with the National Security Council at Camp David at 6.30pm London time. Although Trump has been under fire for this stance on the Charlottesville incident he has issued a more conciliatory tone in regards to North Korea so it will be interesting to see whether this remains the case. As ever expect the unexpected.
In terms of the calendar for currency traders it will be worth keeping an eye on the Canadian CPI data which more often than not has a large impact on the loonie. Analysts are expecting a slight uptick for the Y/Y reading for July to 1.2% from 1.0%. Stateside the main release is the prelim University of Michigan Consumer Sentiment due at 3pm. Last month saw the headline reading decline for the 2nd consecutive month, tracking back to its lowest reading since October 2016 as future expectations declined.
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