Global Economic Optimism Continues

26 June, 2017

Global equities moved higher on Monday as optimism continued to improve on global economic growth. However, USD remained somewhat subdued in early trading as the outlook for US inflation remains tenuous as restrictive bond yields continue to raise concerns about the Federal Reserve’s strategy to tighten their economic policy. In general, markets think the pace of its tightening will be much slower than policymakers want.

The EUR had little impact following the news over the weekend that Italy began winding up 2 failed Venetian banks on Sunday in a deal that is likely to cost the country nearly €17 Billion. Earlier the German IFO posted a reading of 106.8 better than the consensus of 106.4 and the previous reading of 106.5, showing a continued optimistic view of Eurozone Business confidence. EURUSD traded around 1.1200 after the release and the 7-month high, set earlier this month at 1.1296, could be tested if EUR buying momentum, and typical end of month USD selling gather momentum.

Oil prices moved higher after having fallen for five weeks in a row over concerns OPEC-led production cuts have failed to ease a global crude glut stemming in part from increased U.S. oil production. The Baker Hughes report, issued last week, showed US energy firms added 11 new Oil Rigs in the week to June 23rd. This takes the total rig count to 785 which is the most since April 2014. WTI was trading around $43.60pb and Brent at $46.25pb. Markets believe that $40 will provide some support as US shale production will likely abate if it breeches this level.

USDJPY fell 0.2% to trade around 111.55. GBPUSD added to its 1% four-day gain as sterling moved higher trading around 1.2750. After 3 successive days of gains Gold fell back 0.3% trading around $1,247 in early trading. US Durable goods will be released today at 13:30 BST and are expected to shoe a 0.6% decline which is likely to indicate that US consumers are only slightly rebounding and inflation is not likely to rise further which, in turn, adds more credence to the Federal Reserve holding off on any near-term rise in US interest rates.


Source link  
Markets pressured by Huawei problem

Alphabet and some other American IT companies have suspended business with Huawei, which is one of the first examples of major consequences for...

The climate is changing rapidly

British people need to fly less, drive electric cars, eat little meat and turn their home thermostats down to 19 degrees Celsius (66 Fahrenheit) in order to rein...

Chinese stocks saw their worst week

Chinese stocks have taken investors on a ride this year. Shanghai and Shenzhen have been the best performing global markets this year, with the Shanghai...


Risk-sensitive currencies on the rise

Stock markets show growth after the release of strong data for China and Japan as their respective PMIs were better than expected which supported...

Trump again puts pressure on OPEC

President Donald Trump told OPEC on Thursday that its members should start pumping more oil, marking his second warning to the producer group this year...

Turkish lira fell by 5% before elections

The Turkish lira dropped by as much as 5 percent against the dollar on Thursday morning, as the country gears up for elections this weekend. The greenback...


May won't ask for a long Brexit delay

Prime Minister Theresa May won't ask the European Union for a 'long' delay to the Brexit deadline, her office said, after pro-Brexit ministers objected...

Demand for safe assets grows

Markets remain under moderate pressure, despite the Fed comments. Powell's semi-annual speech in Congress reinforced expectations that the US Central Bank...

US-China trade talks: deadline postponed

China's blue-chip index jumped more than 6% on Monday morning on news that Trump would postpone of the tariff's introduction. The U.S. President...

  


Share it on:   or