Market Reaction As Higher Tariffs Kick In

13 May, 2019

The markets were trading mixed by Friday’s close after the tariffs on goods imports from China were hiked from 10% to 25%. This came as the US and China trade talks fell apart.

However, investors are hopeful that there is still a chance for some kind of deal to be reached. Meanwhile, China is expected to retaliate to the hike in tariffs.

Euro Closes With Modest Gains

The single currency managed to post modest gains against the USD. By Friday’s close, the euro was up 0.20%. The gains came as regional economic data saw Germany’s trade balance coming out better than expected. The single currency brushed aside somewhat weaker industrial production figures from Italy and France.

Can the EURUSD Hold on the Gains?

The currency pair closed above the resistance level of 1.1226. At the time of writing, the currency pair is testing this level. If support is established at 1.1226, then the EURUSD could potentially aim to bounce higher. The next main resistance level is seen at 1.1280.

Crude Oil Trades Flat

Oil prices remained muted despite the mounting geopolitical tensions between the United States and Iran. Oil prices closed with small gains of 0.12% on the day on Friday. Investors wait for further geo-political clues including the ground developments in Venezuela and the attempted coup to overthrow the current regime.

Oil is Likely to Maintain the Sideways Range

Crude prices have been trading within the 62.85 and 60.33 levels of resistance and support respectively. This sideways range is expected to continue unless we see a breakout from this level. The bias is to the upside as we expect to see oil prices potentially retesting the 64.55 handle to establish resistance more firmly.

Gold Jumps on Global Cues and Subdued US Data

Besides the ongoing trade tensions, gold prices also managed to rise on the back of muted economic data from the US. The inflation report for April saw headline consumer prices rising 0.3% on the month. Annually, headline inflation rose 2.0% while core CPI eased to 2.1% from the month before. Most of the gains in inflation were due to higher energy prices which rose 2.9% in April.

Gold Prices Settle Back into the Range

Friday’s gains in gold prices did little to keep the price supported. After briefly rising above 1285 handle, gold prices slipped back below this level in early trading today. A continued bearish momentum could push gold prices back to trading within 1285 resistance and 1270 support. Unless we see a daily close above 1285.87, the bias remains flat for the moment. [xau/usd]


Source link  
Markets cautious on trade tensions

The markets were trading cautiously albeit amid a slight risk-on sentiment prevailing. US stocks closed slightly higher while safe haven assets shed...

Risk off sentiment sends gold higher

Investors continued to shun risk assets on Thursday amid a mix of global themes. The stalemate in the US and China talks alongside rumors that the US...

USD Strengthens On ADP Payrolls

The latest monthly private payrolls data from ADP/Moody's Analytics showed that employers added 275k jobs in April. This beat estimates of a 181k increase...


BoC Holds Rates Steady

The Bank of Canada's monetary policy meeting yesterday saw the interest rates unchanged at 1.75%. However, the central bank cut the GDP forecasts...

Markets Open To A Quiet Trading Day

Economic data is sparse with only the release of the US new home sales report later in the day. The quiet start to the week comes ahead of some key...

Dollar Muted As Equities Rally Ease Off

The US dollar closed Monday's session unchanged as earnings reports from Goldman Sachs and Citi Group missed expectations, blaming the US economy....


Market Risk Appetite Wanes

The International Monetary Fund (IMF) cut its global growth outlook once again. For the year 2019, growth is forecast to rise by 3.3% compared...

USD retreats as factory orders weaken

The monthly factory orders report showed a 0.5% decline on the month matching estimates. The declines in February marks a fourth consecutive...

Unemployment Steady, USD Firms

The payrolls report for March saw the US economy adding 196,000 jobs during the month. This beat expectations of a 175,000 increase for the period...

  


Share it on:   or