Coming not long after Fed chair Powell and BoE Governor Carney issued notes of caution on cryptocurrencies and Facebook’s plans to launch its own called Libra the US president has launched a stinging attack on the asset class. Trump tweeted that he was “not a fan” of cryptocurrencies, calling them “not money” and also stating that if Facebook wants to become a bank by issuing its own currency, then it must seek the appropriate certification. Given his propensity to recklessly take to social media and fire off his views on such a wide range of topics, it’s surprising that given its popular nature it has taken Trump this long to opine on cryptos. There was notable wave of selling seen in the markets after Powell’s comments on Wednesday, but the reaction to Trump’s remarks has been far more sanguine with cryptocurrencies on the whole actually trading higher since the series of tweets.
Welcome growth seen in Eurozone industry
All the major economies in the Eurozone reported a monthly expansion in industrial production for May, with the bloc as a whole posting a 0.9% increase month-on-month. Coming after 3 successive contractions this is a welcome development and the prior reading was also revised higher for the 3rd time in the last 4 releases. Against consensus forecasts for a 0.2% rise, the data clearly represents an upside beat but given this points short time and typically volatile nature not too much should be read into it just yet. The Euro has shown little reaction to the news, but it remains on course for a week of small and steady gains on the whole. In terms of equities it’s been a pretty underwhelming week on the continent overall, with the main stock markets not joining in the rally enjoyed by their peers across the Atlantic where Wall Street has reached new all-time highs.
Chinese trade softens; more stimulus ahead?
According to data released by China, exports in June declined by 1.3% on the year in dollar terms in what comes as another example of the adverse impact that the trade war is having on economic activity. Imports also fell, by as much as 7.3% in equivalent terms but some of this decline can be explained away by softer commodity prices and seasonal slowdown into the summer. It’s worth pointing out that while the narrative on US-China trade tensions has improved markedly in recent months, the levies that have been implemented remain in and continue to weigh on growth. Copper prices, widely seen as a proxy on the Chinese economy, jumped immediately in response to the release as traders rushed to seemingly bet on Beijing providing additional stimulus measures in the not too distant future in a further attempt to offset the economic slowdown.
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