Boris Schlossberg
BK Asset Management
US and China spat over HK
Fed minutes on tap
Nikkei -0.53% Dax 0.79%
UST 10Y 1.74%
Oil $55/bbl
Gold $1475/oz
BTCUSD $8130
Europe and Asia:
No Data
North America:
CAD CPI 8:30
USD Fed Minutes 14:00
FX markets remained very quiet but clearly had a risk-off tilt as equity markets across the globe sold off on escalating US-China tensions.
Last night US Senate unanimously passed a resolution in support of Hong Kong protesters raising the ire of officials in Beijing. Under the first Senate bill, U.S. Secretary of State Mike Pompeo would have to certify at least once a year that Hong Kong retains enough autonomy to qualify for special U.S. trading consideration that bolsters its status as a world financial center. It also would provide for sanctions against officials responsible for human rights violations in Hong Kong.
According to Reuters,” There was no immediate response from the White House, which has yet to say whether Trump would approve the Hong Kong Human Rights bill. A U.S. official said recently that no decision had been made, but the unanimous Senate vote could make a veto more difficult for the Republican president.”
The political standoff comes at a time of stalled negotiations and worries from investors that Trump Administration may escalate tariffs against Chinese goods creating a second round of contraction in global manufacturing. With risk assets at near all-time highs, the prospect of a sharp profit-taking selloff in equities remains high, but so far stocks have held their own dropping only 50 basis points overnight and keeping USDJPY stable near the 108.50 figure.
If however, selling intensifies as the day proceeds then the pair could test the 108.00 figure as shorts press their case.
Past performance is not indicative of future results. Trading forex carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
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.