NAFTA deal fails to lift global risk appetite

2 October, 2018

Global investors remained defensive on Tuesday despite the U.S. and Canada agreeing to a new trade deal ending months of uncertainty and providing a lift to specific assets including the Canadian Dollar and Mexican Peso. Apparently, it was the Canadians who caved in at the 11th hour after more than a year of intense negotiations. The new trade agreement, USMCA (United States-Mexico-Canada Agreement), allows President Trump to claim a victory in his trade war, but when looking at the details, the deal differs little from the previous free trade agreement. Thus, I wouldn’t expect the U.S. trade deficit to shrink significantly as a result.

Given that a dark cloud has been removed, the Bank of Canada is now confident to lift interest rates at its next meeting on October 24t. This may continue to provide some support to the Canadian Dollar, which is also supported by higher Oil prices.

Focus will now turn to the ongoing Sino-American trade tensions, but given that U.S. Secretary of Defense James Mattis canceled his trip to China later this month I don’t expect any resolution on the trade front soon. This is keeping Asian equities under pressure today with stocks in Hong Kong, South Korea, and Australia in the red.

In FX markets, the Euro remained under pressure due to concerns over Italy’s budgetary course. Threats that Italy’s credit rating will be downgraded pushed 10-year yields to its highest levels since 2014. Meanwhile, downward revisions to Eurozone’s September PMIs also gave another reason for bears to continue dumping the single currency.

Oil bulls do not seem tired yet with Brent holding above $85, a price last seen in November 2014. Markets are becoming more confident that Brent may reach the $100 price tag as U.S. sanctions against Iran kick in on November 4. If prices remain elevated at current levels and above, expect the IMF and other international organizations to begin revising their global economic growth projections lower. 


Source link  
Recovery of emerging markets

The recovery that emerging markets have managed to build throughout the first quarter of 2019 is set to extend further after the downbeat...

Will the old saying 'third time's a charm'?

The past trading week has overall been a grueling week of swings in either direction for the British Pound. In what's been a pivotal week for Brexit...

Pound at highest level since June 2018

It has been yet another dramatic 24 hours of swings both higher and lower for the British Pound as volatility continues in the lead up to the fast...


Brexit remains primary driver for Pound

What's it going to take to appease UK lawmakers on Brexit? Prime Minister Theresa May clearly hasn't been able to find a solution to that...

Pound climbs on 'improved' Brexit deal

The Pound has successfully managed to conclude a recent run of seven consecutive days of declines and has commenced the new trading week with...

Is the bull market under threat?

It has been a decade since the bull market started back in March 2009. If you dared to invest back then in the US's largest 500 companies, you would have earned...


ECB decision alerts Euro sellers

The EURUSD sank below the 1.13 only to pare back losses, after the European Central Bank confirmed reports and decided to offer cheap loans to banks...

Are equity bulls running out of steam?

Global equity markets have enjoyed one of the best starts to a year since 1991. The Shanghai Shenzhen CSI 300 Index gained 25%...

Chinese equities enter a bull market

What sounded like mission impossible a couple of months ago, now seems doable. President Trump announced late Sunday that he will delay...


In the past 24 hours Bitcoin has lost -0.2% and reached $4015.51354417. Open your trading account with the best cryptocurrency brokers on special terms today.

In the past 7 days the EUR/USD pair has gained 0.9409% and is now at $1.1429. Start trading and making money on Forex today.

In the past 7 days Ethereum has lost -2.82% and is now at $136.658214438. Have the most popular cryptocurrencies compared online 24/7.


Top Brokers offering Forex Market Analysis



Forex Currencies Forecasts



Top 10 Forex Brokers 2019

# Broker Review
1easyMarketseasyMarkets91%
2FXTMFXTM89%
3HYCMHYCM88%
4FxProFxPro86%
5FIBO GroupFIBO Group85%
6OctaFXOctaFX84%
7HotForexHotForex81%
8FXCMFXCM78%
9AlpariAlpari76%
10XMXM74%
  


Share: