Trump sparks up increased trade tensions and confirms N.Korea summit 12 June - Nomura

Ross J Burland FXStreet

Analysts at Nomura explained that President Trump said on Friday that the 12 June North Korea summit will take place, reversing a previous cancellation announcement.

Key Quotes:

"Overall, the planned summit could reduce the likelihood of a materially disruptive development in US-China trade relations over the near term."

"Commerce Secretary Ross will be traveling to China on 2-3 June, barely one week after a somewhat hawkish statement from the White House about the ongoing Section 301 investigation."

"US-China talks while Ross is in Beijing will take place with an increasingly tense background following trade developments this week with major US trading partners. Thus, the news on the summit today may reduce near-term US-China risk, but uncertainty remains."

"The Trump administration announced on Thursday that it will impose steel and aluminum tariffs on the EU, Mexico and Canada after a temporary exemption expired on 1 June. This is the first time that the Trump administration has imposed meaningful tariffs on imports from these major trading partners."

"Consequently, Thursday’s announcement marks a notable shift in policy. Moreover, the timing of the announcement could put further strain on ongoing NAFTA renegotiations."

"Finally, the new tariffs come at a time of increased US-China trade tensions."

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

GBP/USD flirts with tops near 1.3470

GBP/USD manages to regain composure and challenge the area of daily highs around 1.3470 on Friday. Cable picks up pace despite marginal gains in the Greenback in a context of swelling geopolitical tensions and rising global oil prices.

EUR/USD trims losses, back above 1.1500

EUR/USD picks up some pace and bouces off earlier lows, reclaiming the 1.1500 threshold and beyond at the end of the week. The pair’s modest pullback follows a persistent risk-averse market mood and renewed buying interest for the US Dollar.

Gold: The $4,000 mark holds the downside for now

Gold faces renewed selling pressure, falling sharply toweard the $4,000 mark per troy ounce as the US Dollar regains momentum. Escalating US-Iran tensions are keeping inflation concerns and expectations of further Fed rate hikes alive, weighing further on the yellow metal.

Bitcoin eyes 50-day EMA breakout, Ethereum consolidates, XRP steadies

Bitcoin, Ethereum, and Ripple trade near key technical levels on Friday as the broader cryptocurrency market pauses following last week's recovery. BTC is approaching the 50-day Exponential Moving Average while ETH continues to consolidate between two major EMAs.

Warsh needs to restore his reputation

We were glad to see our deeply negative reaction to the Warsh press conference was not some personal peculiarity. Just about everybody in the financial press felt the same way. The consensus is building it’s not the Fed in the dog-house but only Warsh. Today the WSJ changed it tune and blasted Warsh—"the honeymoon is already over..”

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.