Shares in Asia Pacific closed mixed on Friday, as oil prices rose following attacks on two tanker ships in the Gulf of Oman on Thursday. Meanwhile, European stocks started the day lower as the world focused on increasing Middle-East tensions with some claiming that the drums of war are loud and clear. Yesterday's attack on 2 oil tankers was officially blamed on Iran by Pompeo out of the US, which has fuelled global tensions even more. U.K. shares, noted steep losses this morning as Brexiteer Boris Johnson landed a convincing victory in the first round of voting for the Conservative party leadership.

US/China Trade Tensions Deepen

US National Economic Council Director Kudlow, stated that China broke the WTO trade law and that the POTUS will act on it, which deepens US/China tensions even further. Kudlow also stated that President Donald Trump could take further action against China if President Xi Jinping doesn’t agree to a meeting at the Group of 20 summit of leading economies in Japan later this month.

Retail Sales Data in Focus

All eyes will be on this afternoon's Retail Sales out of the US; weaker than expected readings could be bullish for US stock markets as they will support expectations of the Fed needing to cut rates. Core retail sales in May is expected to have jumped 0.5%, according to market consensus.

Forex Preview: Dollar Higher

The greenback remained largely supported on the rising Middle East tensions and the outlook of a possible US war with Iran. The EUR/USD pushed lower as rumours of an Italexit and the making of a new Italian currency persisted. The GBP/USD is also in the red but seems to find its bottom close to but still below the important $1.27 mark, ahead of the BoE governor Carney's speech later this afternoon.

GBPUSD

 

Oil Steadies, Gold Higher, BTC Flat

Elsewhere, gold prices advanced this morning, moving closer to their 14-month high hit last week, as trade and political turmoils, along with U.S. rate cut expectations propped up demand. The rise of the noble metal also indicated that the broader risk-OFF tone is not to be overlooked in the midst of a still high standing stock market and Fed rate cut prospects - which could also be mere fantasies. Oil prices corrected lower this morning after noting sharp gains following attacks on two oil tankers in the Gulf of Oman that stoked concerns of reduced crude flows through one of the world's key shipping routes. BTC remains solid within the 8k range and could be looking to become a proxy tool in this whole trade war and might actually gain from it.

 

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