Markets swing on trade news: XAU, BTC amass USD outflows [Video]

Ipek Ozkardeskaya Swissquote Bank Ltd

Trade headlines are accelerating again. Markets ended last week on a sour note after President Donald Trump threatened to impose a 50% tariff on European imports by June 1st, prompting a sharp selloff in major US and European indices. He also warned that Apple could face a 25% tariff unless it relocates its production to the US. Yet, sentiment has shifted sharply this morning. The Nikkei 225 rose more than 1.7%, buoyed by hopes that the US and Japan are progressing toward a trade deal. European and US futures rebounded on news that the 50% EU tariff threat will be postponed to June 9th.

Selling pressure on the US dollar continues, driven by renewed trade frictions and swelling concerns over US debt. The dollar index is nearing its April lows, while the EURUSD has opened the week on strong footing—partly in relief over the delayed EU tariff deadline, though it's worth noting the euro was already rising on Friday when the tariff threat emerged. The euro appears to be acting as both a safe haven and a risk-on asset amid trade headlines. Cable surged past 1.35 for the first time in over three years, while the USDJPY looks poised to test the 142 level to the downside, gold continues to hold above $3,300 per ounce, supported by trade and debt uncertainties and Bitcoin is catching a bid amid capital outflows from the dollar and growing adoption by institutional players.

The week will bring fresh inflation reports from major Eurozone economies and Japan, a likely rate cut from the Reserve Bank of New Zealand (RBNZ), the US GDP and PCE updates and Nvidia earnings!

Author

Ipek Ozkardeskaya

Swissquote Bank Ltd

Ipek Ozkardeskaya began her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked in HSBC Private Bank in Geneva in relation to high and ultra-high-net-worth clients.

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