After a five-day losing streak, the euro/U.S. dollar (EUR/USD) currency pair has finally – at least for the time being – put an end to its recent downward trend and was climbing back towards the 1.16 handle. Other major euro crosses were also trading higher, suggesting it was not just the dollar weakness that had helped to underpin the EUR/USD.
Crude oil prices are on the rise as President Donald Trump warns the world that anyone trading with Iran will not be trading with the United States. That pronouncement is directed at the European Union, which issued a statement Monday in Brussels saying, "We deeply regret the re-imposition of sanctions by the U.S., due to the latter's withdrawal from the Joint Comprehensive Plan of Action (JCPOA).
There are no two ways about it: 2018 has been an absolutely brutal year for gold bulls. The yellow metal came into the year with some impressive momentum, rallying from around $1240 in mid-December to hit a peak above $1,360 per oz. by late January, but the proverbial “wheels have fallen off” since then.
A word of caution to anyone who thinks trading is a passive exercise. Yes, Facebook got taken to the woodshed right there in the 618th day of the rally. The stock has not recovered and with a screaming headline at Drudge this morning, it appears they aren’t learning their lesson. They will continue to invite regulators. But that’s a stock market story for a different day down the road.
After minor overnight volatility, U.S, European, Japanese and Hong Kong benchmarks are near unchanged but those from China are deeply in the red. The German DAX took a sweeping hit after a big miss on Factory Orders this morning but has regained positive; Euro weakness is supportive. In an editorial in its state-run newspaper to start the week, China directed sharp comments at President Trump, doubling up on calling him a bully and saying that it is in their best interest to sacrifice the short-term term economics for the larger and longer-term picture.
Crude oil prices are rising. We have a falling U.S. oil rig count and a surprise drop in Saudi oil production, against a backdrop of increasing geopolitical risk. Baker Hughes’ oil rig was countdown two, gas rig count dipped by three.
The dollar has remained bid against most currencies post-Friday’s U.S. jobs report. The greenback rose on Friday in reaction to the mixed-bag nonfarm payrolls report which showed a weaker-than-expected headline number, but that was offset by positive revisions to the previous reports and a decent but expected rise in average hourly earnings figure.
Escalating trade tensions between the U.S. and China remain the financial markets’ hottest topic. President Donald Trump seems to be celebrating winning the first battle of this war, saying that “tariffs are working big time” in a Tweet on Sunday. He says that they will enable the U.S. to start reducing the large amount of debt accumulated throughout President Barack Obama’s administration.