Another day, another round of trade war tweets drawing the attention of traders. To extend the trade war analogy, this morning’s causality was due to friendly fire. In a series of tweets this morning, U.S. President Trump criticized the iconic American manufacturer Harley Davidson, which has shifted some of its production overseas as a result of increased duties.
Gold has been falling sharply of late, dropping by a good $50 in the space of nine trading days. At the time of writing, the yellow precious metal was trading around $1,257, its lowest level since Dec. 18. The perceived safe haven metal has been unable to find much demand from flows out of the equity markets which have been tumbling amid concerns over global trade disputes and the outlook for rising interest rates.
For euro/British pound (EUR/GBP) currency pair traders, there’s been good news and bad news over the last couple of months: The good news is that they’ve had plenty of time to watch the World Cup…and the bad news is that neither bulls nor bears are making any money in the pair!
Crude oil prices had a tough time staying higher as trade war fears and distraction took the market focus off tightening global oil supply. While many are making ominous predictions of what this trade war may do to economic growth, the reality is that if we are overestimating these concerns the oil market is going to be woefully undersupplied.
Global equities are once again opening the week on the back foot as a joint story from the Wall Street Journal and Bloomberg further exacerbated US-China trade tensions. The report alleges that the US will increase scrutiny of Chinese investments in certain US industries deemed critical to economic and national security.
The British pound/U.S. dollar (GBP/USD) currency pair has remained largely supported after the Bank of England’s policy decision on Thursday. The BoE decided to keep interest rates unchanged last week but the meeting was nonetheless seen as being hawkish since three MPC members voted for a rate hike rather than just the two expected. The pound rallied sharply on that day and it eked out a gain on Friday even if it closed off its best levels.
All eyes are on the Turkish Lira this morning with the currency rallying sharply in early trade today, following the news that Turkish President Recep Tayyip Erdogan has won the weekend election in Turkey. The Lira had advanced as much as 3% at time of writing with the currency currently standing as the only emerging market to be trading higher against the U.S. dollar.