A fresh wave of risk appetite has swept the markets yesterday creating a worldwide market rally after news that Trump postponing the additional 10% tariffs on key goods until Christmas and that China and the U.S. are to resume trade talks in Washington in September as planned. Signs that point to major central banks being more accommodative and cutting rates further also helped push global risk markets higher even amid rising geopolitical tensions in Italy, Hong Kong and Argentina.
Meanwhile, economic data out of China came in weaker overnight adding to the mounting data that the global economy is declining and that is also why the latest risk-on impulse is not likely to last, as none of the core geopolitical issues was actually solved or has changed in any way. Markets will focus on the latest EU GDP data at 9:00 GMT today after a devastating ZEW yesterday showed how much the economy in Europe and especially Germany is nosediving. Today, major EU indices opened lower, erasing some of yesterday’s gains.
Forex Preview: Yen Gains, EUR/USD Looks for Direction
The USD gained a little after the news of tariff delay broke yesterday but hasn't moved much really. The EUR wallowed below the 1.12 again but remained above the key 1.1150 which it needs to break through or above the 1.12 on a daily close for a clear directional statement. The safe haven JPY edged higher against its US counterpart this morning after some weak data out of China.
Oil Prices Dip, Gold Below $1,500
Oil prices dipped this morning on disappointing economic data from China and a rise in U.S. crude inventories, erasing some of yesterday's gains after a good bull run on trade-talk-hopes. Watch for the Crude oil stocks this afternoon for more data. Elsewhere, gold had a crazy ride yesterday in both directions with big volatility and is presently trading around the key $1,500 level. However, given the geopolitical issues that still persist, I continue to see dips in Gold as interesting “buy” opportunities.
The price of Bitcoin has fallen below $11,000, and is currently hovering $10,600 marking a near 7% drop for the day. After several days of being unable to break the 12k level to the upside, BTC/USD is now wallowing below the 11k mark and may test the psychological 10k mark on its current sell-off wave.
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