Asian equities fell on Tuesday after crude oil prices tumbled by more than 4.6% during the previous session, following reports that Saudi Arabia has offered additional crude supplies to some of its Asian customers and that the U.S. may release some of its strategic petroleum reserves to bring prices down.
Global equity markets were mostly mixed while the Dollar dipped ahead of Fed Chair Jerome Powell’s first Congressional testimony later today. Powell’s testimony could offer investors a fresh opportunity to appraise the Federal Reserve’s monetary policy approach for the second half of 2018. The central bank head is expected to reiterate that the Federal Reserve remains committed to gradual monetary policy tightening.
Investors have been left wondering whether today’s sluggish jobs data may have any implications on the Bank of England’s rate decision next month. Total pay levels rose at an annual rate of 2.5% in the three months to May, unchanged from April, according to the ONS.
Following the relentless rally throughout last year, the price action in the major US stock market indices over the last six months has felt like purgatory. After seeing a blowoff top to new record highs at 2875, the S&P 500 has been consolidating in a lackluster range between 2600 and 2800 since the start of February, frustrating both bulls and bears alike.
The U.S. dollar was higher across the board against major pairs on Friday. Trade war concerns rose heading into the weekend and the comments from U.S. President Donald Trump during the week sparked a rally of USD buying. Trump has been outspoken on NATO, trade and the Brexit deal while economic indicators and the US Fed have been supportive of the greenback.
Global equity markets are back in the green this morning and cueing off a softer trade rhetoric from China. The market is focused on China’s response to the White House’s third wave of tariffs worth $200 billion and ultimately, as we pointed out here yesterday, China only imported $130 billion of U.S. goods in 2017.
It’s been a more positive start to trade on Thursday, with equity markets in the green and paring Wednesday’s losses as investors continue to weigh up what impact the latest trade tariffs will have on the global economy. While markets have typically reacted negatively to any escalation on trade, the overall impact has been relatively modest under the circumstances that suggest investors are far from panic mode right now.
The U.S. dollar has resumed its rally after starting the first week of July on the back foot when it was hit by profit-taking following a three-month winning streak. Now that the Dollar Index has turned positive on the month could it finish the month of July higher, too? Investors have been piling in on the dollar because of higher interest rates in the United States and expectations that monetary conditions will tighten further in the coming months.