Trade talks between the U.S. and China appear to have stalled, pulling US stock markets lower on Friday and we may see this bearish trend drag into this week. European markets opened mixed today as geopolitical risks mounted. Specifically, U.S. President Donald Trump warned via Twitter that the newly imposed oil sanctions would spell the “official end” of Iran. China responded by officially condemning US sanctions on Iran and told the US that attacking Iran is not an option as Iran has China’s support. The entire situation makes trade talks even more challenging; intensifying tensions between the two superpowers even further.
Politics Take Over this Week’s Agenda
This week, investors will also focus on political developments with the EU election and another attempt by UK PM Theresa May to vote her Brexit plan through parliament following a scandal in Austria that brought down the Austrian government right before the elections.
Forex Preview: USD Strength Prevails
The dollar firmed this morning after data showed United States consumer sentiment jumped to a 15-year high in early May amid growing confidence over the economy’s outlook. The USD has gained particularly against EUR and GBP and continues to edge towards the 7 mark against the CNH. Meanwhile, the EUR drifted further lower on political difficulties ahead of the EU elections.
DAX Edges Lower
DAX started the week in the red after Trump stated the US loves Europe but it needs to be careful as it treats the US “a lot worse” than the US treats the EU. There’s also the open investigation into Deutsche Bank over possible money laundering in 2016 and 2017. Deutsche Bank AG finished last week at all time lows while its compatriot Commerzbank slid 2.4% on Friday.
Oil Jumps, Gold Wallows at 2-Week Lows
Oil prices gained this morning further after statements by Saudi energy minister about a consensus among the OPEC+ members to drive down oil inventories. Meanwhile, spot gold stirred right at the 200-day EMA's after its drop to two-week lows last week. The 200-day EMA has served well as a support in recent months and could hold this time, especially considering the overall developments that could spread a risk-off mood globally.
Elsewhere, BTC came back strong over the weekend and attempted another break of the $8,000 level but failed to remain hold its ground this morning.
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The bullish tone in the Greenback motivates EUR/USD to maintain its daily range in the low 1.070s in the wake of firmer-than-estimated US inflation data measured by the PCE.
GBP/USD clings to gains just above 1.2500 on US PCE
GBP/USD keeps its uptrend unchanged and navigates the area beyond 1.2500 the figure amidst slight gains in the US Dollar following the release of US inflation tracked by the PCE.
Gold keeps its daily gains near $2,350 following US inflation
Gold prices maintain their constructive bias around $2,350 after US inflation data gauged by the PCE surpassed consensus in March and US yields trade with slight losses following recent peaks.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.