05/ 07/ 2018

All Eyes on Trade wars & FOMC minutes after a non-eventful European session

Given the US holidays, markets were quiet following a non-eventful European session where the calendar there too was light of events, of which those that were up for grabs were lightly ignored. The Bloomberg report citing sources over ECB policy makers are not pricing an easy interest rate hike before December 2019 made euro pop up. For the rest of the week, eyes will be firmly placed on China and the US engaged in the trade war. Chinese tariffs on US goods to take effect on Friday. Trump administration’s tariffs on up to $50 billion worth of goods from China are also due to take effect on Friday. Along with that the ban of Micron chips in China made the US company shares to dip above 5%.

Looking ahead, things will start getting interesting Thursday, with some data coming from Germany, and the US releasing the ADP survey, the Minutes of the latest FOMC meeting that will reveal the discussions on lifting the forecast to four rate hikes this year and other minor employment figures, which are relevant ahead of Friday when the country will release the Nonfarm Payroll report. 

04/ 07/ 2018

Dollar dips ahead of US holiday

The dollar weakened against a basket of rival currencies after notching up three consecutive months of gains as investors wait for minutes of the U.S. Federal Reserve's June meeting and jobs data that should confirm whether policymakers will raise interest rates twice this year. European shares gained on Tuesday after German Chancellor Angela Merkel's conservatives settled a row over migration and eased some anxieties of investors, though worries about trade wars remained.

Looking ahead, Markit PMIs will be released from UK and Eurozone. It's going to be a quiet session on the US side, with American institutions shuttered for the July 4th holiday, and traders will be looking towards Friday's Non-Farm Payrolls to give markets a quick volatility boost to cap off the week.

03/ 07/ 2018

Dollar dips, euro steadies after German coalition partners resolve row

The U.S. dollar edged higher against the yen on Monday as investors ramped up bets that escalating trade tensions between the U.S. Also, it was a solid performance led mostly by Euro after German Chancellor Angela Merkel was dealt a fresh blow when her interior minister offered to quit in an escalating row over migration policy. Interior Minister Horst Seehofer, who has called for tougher border controls, said he was ready to step down as minister and as chair of his Christian Social Union (CSU), junior coalition partner in Merkel's government. The euro earlier in European session rose to as high as $1.1698 in a knee-jerk reaction to the news.

Concerns over a potential trade war between the U.S. and its major trading partners in Canada, the European Union and China are pressuring global equity markets yesterday. With this, traders are reacting to retaliatory events and the imposition of fresh tariffs at the end of the week.

02/ 07/ 2018

Week Ahead |Stronger Dollar and Euro fails amid German Coalition crisis

Canadian Dollar ended last week as the strongest one. Strength in oil price, with WTI hitting four-year high was a factor. Solid Canadian GDP and Business Outlook Survey also support a July Bank of Canada Rate hike. Euro followed as the second strongest as markets cheered EU agreement on migration during the summit. That could be seen as temporary easing German Chancellor Angela Merkel’s domestic political pressure too. Despite some late setback, Dollar was the third strongest. It’s more likely the Greenback is taking a breath after a strong quarter, than reversing.

It’s a big week ahead, with retaliatory trade tariffs, a heavy economic calendar, central bank commentary and policy in focus.