Global Stocks Rise as Progress Made in Singapore Between Trump and Kim

It is not yet known what progress has been made on denuclearisation, with a press conference scheduled for 06:30 GMT. USDJPY advanced higher to 110.490 overnight with support at 110.125. Markets are positioning ahead of tomorrow’s FOMC and Thursday’s ECB meetings when volatility should pick up.

Markets were in a risk on mode yesterday with Stock markets higher following the G7 summit. The gains were small at the beginning of a busy week for markets. The FX markets painted a different story as USDCAD rose to the 1.30000 level with Canadian PM Trudeau saying that they are preparing retaliatory measures as the relationship between the allies breaks down. The USD strengthened as the G7 passed much as expected to postpone the worst fears of the market.

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UK Industrial Production (YoY) (Apr) was 1.8% against an expected 2.7% from a previous 2.9%. Industrial Production (MoM) (Apr) was -0.8% against an expected 0.2% from 0.1% previously. Last month this data was flat but it disappointed expectations and missed by around 1%. Manufacturing Production (YoY) (Apr) was 1.4% against an expected 3.1% from 2.9% previously. Manufacturing Production (MoM) (Apr) was -1.4% against an expected 0.3% from -0.1% previously. This figure has missed expectations and fallen under the zero mark showing a contraction on the monthly number. The negative impact from Brexit is continuing to plague the economy as orders are delayed and production postponed. GBPUSD fell from 1.34274 to 1.33602 pairs can move because of this data release.

  • EURUSD is down -0.11% overnight, trading aroun1.17689.
  • USDJPY is up 0.24in the early session, trading at around 110.302
  • GBPUSD is down -0.07% this morning trading around 1.33639
  • Gold is down –0.21% in early morning trading at around $1,297.70
  • WTI is up 0.15% this morning, trading around $66.16

This article was written by FxPro

Trump’s Emotions Over Trade Shouldn’t Influence Investing Decisions

Scanning the news on Monday, or the day when most investors start getting the information they need to begin the trading week, I noticed very little mention of President Trump’s comments over the week-end at the G-7 conference.

CNBC said, “President Trump lashed out at U.S. allies Canada and Europe on trade issues at the G-7 meeting over the weekend.” However, the popular business website failed to say what “lashed out” meant. Other terms used in articles were “escalated criticism”, “turbulent trade talks” and “sparking tensions”.

If you only read Monday’s news, you may come away with the idea that Trump was being belligerent while bringing the world to the brink of a global trade war. So if you missed the news over the week-end, perhaps this may help you create a different opinion of the events.

Trump said trade among the G-7 nations should be free of tariffs and other barriers, in what looked like an olive branch to close allies amid simmering tensions over duties imposed on steel and aluminum.

“No tariffs, no barriers, that’s the way it should be – and no subsidies,” the president said at a press conference.

Trump didn’t elaborate on how or whether the U.S. would reduce its tariff barriers. Instead, he pointed to Canadian duties on U.S. dairy.

“We don’t want to pay anything – why should we pay?” Trump said. “Ultimately, that’s what you want. You want a tariff free, no barriers and you want no subsidies.”

Essentially, Trump offered his opponents exactly what they say they want, knowing full well they don’t dare accept it. It seems to me that he crushed their argument by exposing their hypocrisy.

Unfortunately, it’s nearly impossible to make a rational trading decision on news articles that touch on the emotions of the President and the tone at which he delivers his message. However, all you have to do is look at the weaker Canadian Dollar, rising U.S. Treasury yields and firm demand for risky assets to know that professional investors know that Trump made his point loud and clear and that eventually those nations that seem to say they are all for free-market capitalism publicly then turn around and create trader barriers to the free flow of U.S. goods and services the first chance they get, will eventually cave to the wishes of the President.

U.S. – North Korean Summit

It’s hard to tell what impact, if any, the summit between President Trump and Kim Jong-un will have on the markets. I suspect that if its good news, there will be a rally in the equity markets, but if the new is bad, losses are likely to be limited because the outcome means almost nothing to investors.

We saw this when North Korea started testing missiles. The first test brought a negative response by traders that was eventually absorbed by investors who saw it as a buying opportunity. The next few missile tests saw even smaller reactions in the market.

Trump drives US out from Iran Nuclear Deal and oil goes below 70 $

When Mr. Trump tweets,  market maker answer! Yesterday the US President Donald Trump announced on Twitter, the first social network in terms of communications that a President never used first, that today at 2:00 pm (UTC NY) he will tell about his decision on the Iran Deal.Trump Tweet

So Mr. Trump anticipated the press conference that was planned for Saturday 12 May, surprising the financial market. A few minutes later, The New York Times published important revelations about the “White House” decision, citing the European source. As NYT writes, seem that the United States President decide to go out from Iran deal and that he is ready to impose new economic sanctions on the Tehran Government. The decision arrives after three years of the deal, stipulated in July 2015.

The agreement was the result of an intense work by Mr. Obama’s administration; to date, Iran is bound to sell at other nation 97% of nuclear fuel and it can not develop nuclear technology more, even not for civil use. As part of the agreement Iran obtain numerous commercial advantages, so the nation is not isolated as it used to be.

Therefore all attempts made by the French President Macron, Angela Merkel and  The Foreign Minister of England  Boris Johnson are failed. According to sources close to the white house, the agreement failed because Tehran increases missile capacity and its expansion and influence throughout the Middle East. This influence, according to Trump, was financed by the money that was returned to the Iranians as part of the agreement, as well as by the oil trade, which is more thriving than ever in the region.

Market Maker watches now to the oil price because after Trump’s tweet, the WTI loss about 1 dollar in one hour. They are not sure about a “buy on rumors, sell on news”, but it would seem certain that the market has already discounted the news reported exclusively by the New York Times and that this evening only awaits a confirmation of this.

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Crude Oil Graph

While the Saudis push for oil to be above $80 a barrel, according to the Wall Street Journal, through a change in economic policy compared to previous years, on the oil front, the trade war between the United States and China is always kept under control. We will see in the next weeks what the effects of this debate on raw materials will be.

Global Stocks Retreat after Trump’s Threat on Russia

The U.S Dollar has been weaker and European equities have seen a selloff as the Euro and Pound have strengthened. CPI will come from the U.S today, and later the Fed’s FOMC Meeting Minutes will be published.

European Market Retreat as Forex Shakes Markets, U.S Reports Awaited

European markets have lost value this morning as the Euro and Pound have gained against the U.S Dollar in forex. Inflation numbers from China published this morning came in below forecasts, highlighting global inflation remains lackluster in many respects. However, yesterday’s Producer Price Index from the States was strong, and today’s Consumer Price Index will prove crucial to traders. Yesterday’s buying spree on Wall Street has helped global investor sentiment. U.S and Chinese leadership are both conveying a desire to negotiate and avoid a trade confrontation. However, the sentiment turns today as tension between US-Russia grows over the Syrian conflict.

Italian Retail Sales have come in better than expected also this morning, but investors are primed for the inflation results from the U.S and are also awaiting the Federal Reserve’s monthly Meeting Minutes publication.

Fed Report will be Read Carefully, Euro & Pound Gaining Versus U.S Dollar

The U.S Dollar has remained weak in forex this morning as investors seemingly trade on the belief other central banks, excluding the U.S Federal Reserve, will begin to react to the Fed’s hawkish policy and counter with moves of their own. The Euro and Pound are testing important short-term resistance, but traders are also bracing themselves for the CPI results from the States coming soon and will read through the Fed report later this evening attentively.

Precious Metal Responds with Solid Climb, Traders Eyeing Resistance Ahead

Gold has broken through short-term resistance and is near 1350.00 U.S Dollars an ounce. The emergence of risk appetite has created a frenzy in commodities and the precious metal has responded with a solid climb. Speculators should eye resistance up ahead at 1350.00 U.S Dollars cautiously.

Inflation Data Key Ingredient Today from U.S, Fed Minutes Report Coming

The Consumer Price Index data will be a key ingredient for traders upon its release at 12:30 GMT.

  • 12:30 PM GMT, U.S, Consumer Price Index
  • 14:30 PM GMT, U.S, Crude Oil Inventories
  • 18:00 PM GMT, U.S, FOMC Meeting Minutes

Yaron Mazor is a senior analyst at SuperTraderTV.

SuperTraderTV Academy is a leader in investing and stock trading education. Sign up for a class today to learn proven strategies on how to trade smarter.

The US Has All the Tools to Win a Trade War

Advocates of Trump and the current administration will be cheering the president on, but whether the U.S President will find his supporters by his side in the months ahead remains to be seen. Trump’s does have a point, however, it’s a risky path.

There are multiple implications to using the threat of a trade war to expedite the rebalancing of trade terms with America’s key trading partners and when considering the fact that the trade terms have evolved over many decades, ripping off the band-aid that has, not only provided support to the U.S economy, but also the global economy, is not going to come without pain.

U.S consumers and manufacturers are at greatest risk.

A sudden increase in the cost of imported goods from China, would likely to lead to a material pullback in domestic consumption. U.S manufactured goods are just unable to compete and to be frank, even with tariffs, goods from China may ultimately be the preferred option. A material pullback in domestic consumption, something that the U.S economy relies heavily upon, is certainly to the detriment of the economy and the voter.

On the flip side, China is a key market for many U.S multinationals, including the likes of Apple, Microsoft, Boeing, IBM and General Motors, to name but a few. China is more than capable of hitting U.S manufacturers where it hurts, ultimately slamming the U.S economy and the U.S Dollar.

However, the US, still, has more tools to win a trade war with China. Donald Trump plays chess with the Chinese. The US is the number-one consumer in the world and China would not be pleased to lose its biggest client.

China’s reserved response last week was likely to be in the hope of a resolution to trade indifferences that has led to the U.S President delivering on a campaign promise. The lack of a more aggressive response certainly suggests that China is looking to avoid a trade war, while demonstrating an unwillingness to sit by and be bullied by the U.S.

There are ultimately many ways that China can hurt Trump and the Republicans. A cut back on soybean and other agricultural imports would see Trump’s support lifeline from the mid-West be crippled, a move that would undoubtedly hit the President’s ratings and prospects for a 2nd term.

Another retaliatory approach could be through a sell-down of its current Treasury holdings and reduced participation in auctions, a move that comes at a time when the U.S is in serious need of foreign investment, protectionism in place or not. Domestic appetite for U.S Treasuries alone would just not cover it. China’s holdings of U.S debt surged by a reported $126.5bn last year, the largest increase in 7-years.

The downside to such a move would be a material decline in the value of China’s foreign reserves, though the Chinese government is more than capable of devaluing the Yuan, a move that would certainly rile the U.S President even further. Once again, China will be on the defensive side.

Granted that the U.S may be able to win the current battle, but winning the war will be an altogether different proposition, with a full-blown trade war likely to only see losers, with no winners.

Can Trump’s move really make an impact on the current U.S trade deficit?

Well, only if trading partners sit back, accept the tariffs without retaliation. As the markets saw last week, no major global economy is going to sit back, particularly China. The only question that remains, is whether Trump will really push through on a trade war and how aggressively China and the rest respond.

Recessions and a Global Depression have resulted from previous trade wars. While Trump spent much of the early part of the year boasting about the record highs in the Dow, the S&P500, and the NASDAQ, the bragging has stopped and it could soon be the U.S economy and the global economy begin to pay the price…

“Trump’s Tariff Plans Have Created Uncertainty and Put Global Stock Markets under Pressure”

Nigel Green, founder, and CEO of deVere Group is speaking out after global stock markets come under heavy pressure on fears over the rising trade tensions between the U.S. and China – the world’s largest and second largest economies, respectively – and how global economic growth and corporate earnings will be impacted.

President Donald Trump confirmed tariffs on Thursday on up to $60bn in annual Chinese imports. He stated that China must pay for decades of unfairly acquiring American intellectual property. Today, Beijing unveiled plans to impose levies on 128 U.S. products, representing approximately $3bn in imports.

Mr. Green comments: “Trump’s trade tantrums are putting him on the wrong side of history”.

“By imposing tariffs and opposing free trade and globalization, he is potentially creating a totally unnecessary trade war that will be detrimental to the U.S. and global economies. It is almost like he is trying to drag America back to a time that no longer exists.

“For all Trump’s protectionist grandstanding, globalization in the world of trade and commerce is here to stay and will, if anything, only gain momentum in coming years and decades. Globalization is marching on with or without the U.S.

“Applied correctly, globalization promotes free trade which encourages global economic growth, creates jobs, makes firms more competitive, and lowers prices for consumers.”

He continues: “Trump’s tariff plans have created uncertainty and put global stock markets under pressure.

“I would urge investors to review their portfolios to ensure that they are properly diversified across regions, sectors and assets classes.  Diversification is a key tool to mitigate potential risks and to take advantage of the inevitable opportunities that bouts of volatility present.”

Mr. Green goes on to say: “Over a longer time horizon, investing in equities is almost universally recognized as one of the best ways people can accumulate wealth.

“See-sawing markets are a chance for investors to put new money into markets at lower prices. A slump in the market often means that there are high-quality equities available at more attractive prices.

“Of course, no–one knows for sure what will happen in the immediate future, but history shows that stock markets rise over a longer-term period.”

The deVere CEO concludes: “With the possibility of a Trump-induced trade war heating up, investors should review their portfolios to make sure they remain on track to meet their long-term financial goals.”

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

Tillerson, Hammond, Draghi – This Morning’s Markets

Trump stole his thunder! As the chancellor was speaking the news broke that US Secretary of State Rex Tillerson had been sacked and replaced with former CIA Director Mike Pompeo. The move shows that not only is it America first, but his protectionism runs deeper, and we must ask whether the timing of this important, after Tillerson’s comments on the Salisbury Spy attack.

Market Movements

GBPUSD moved higher and adding both the Chancellor’s performance and Tillerson’s sacking to the mix we have seen some very strong gains with cable up trading through the key upside trendline I had highlighted on my Twitter feed yesterday morning. This was initially a pound move however it soon became much more apparent that the downside on the US dollar was having much more of an effect, with EURUSD, USDJPY and Gold prices all posting similar moves.

Spring Statement

Let’s focus on the UK, and the Chancellors big moment for just a second, and why did we see the market take his statement without any skepticism after all Brexit could derail all of these plans. So calling an upward revision to GDP is a bit of a stab in the dark. What did the chancellor tell us:

  • The Budget deficit is shrinking between 2018 and 2023 it is now expected to shrink from GBP213BN to GBP192BN.
  • A rise in the economic growth forecast with the UK now expected to grow by 1.5% in 2018 vs the 1.4% expected.

They were probably the main headlines that really drove the markets, and there was next to no mention of the “B” word! Although there was an estimate on the Brexit financial settlement, with the government believing it to come in at around GBP37BN. However, despite not really touching on the subject, the uncertainty that Brexit creates cannot be overlooked. We know that the Brexit factor is already influencing productivity and there is no way the chancellor can rule out Brexit totally changing his numbers at any given point. For me, that’s why the markets decided the US dollar/Tillerson story was the one to get their teeth into.

Tillerson’s exit

As mentioned earlier, the Tillerson issue is not, maybe, a surprise. We are already looking at the highest turnover of staff in a White House for decades. However, is the willingness to fire high ranking officials and politicians if they don’t toe the party (Trump’s) line? The sacking of Rex Tillerson as Secretary of State comes just a matter of weeks after Gary Cohn, the President’s high ranking economic advisor left his post. The market has shown far more resilience over this time, probably because this is the same old story when it comes to the Trump administration.

Draghi Headlines

  • Inflation on track
  • APP remains necessary
  • Inflation adjustment would end QE
  • Must be patient on policy

After the moves on the greenback yesterday, this morning has seen Mario Draghi undo some of the work on EURUSD with the pair falling lower after the ECB president was a little clearer on some points. Inflation was the main point he made saying that stronger CPI adjustment would be a reason to end the QE, but of course, reiterated that patience is the key when it comes to the monetary policy.

He may have been clearer but of course, there was very little here that we didn’t already know, especially around the inflation situation, and the patience we must all have over policy. Really the moves were not really Euro moves, rather a spate of US dollar buying that has led both GBPUSD and EURUSD lower and USDJPY higher.

Stocks ended lower overnight as the Tillerson/Pompeo news continued to rattle investors. The expectations are that the trade wars could now intensify as we expect the US to be much tougher on its foreign policy going forward. Fears are now circling about the future of Treasury Secretary Steve Mnuchin, however, this seems like a knee-jerk reaction.

With Draghi this morning, it will be a case of hanging on for the US retail sales later this afternoon. The February reading could see the number jump to 0.3%, a stark improvement from the -0.3% print for January. Vehicle sales, however, do seem to be slowing and falling gas prices could show up in this month’s number.

This article was written by James Hughes, Chief Market Analyst at AxiTrader

The Week Ahead – Trade Wars Again the Big Topic for the Week

The Deals will have to be more beneficial to the US, otherwise they could face the uncertainty of more Trump led roadblocks.

Deals are already in progress with both Canada and Mexico, after their exemptions from the steel and aluminum tariffs, and now, this is also the case for Australia after Trump had talks with PM Turnball over the weekend, with the two leaders supposedly working on security agreements to avoid the imposing of the same tariffs.

Talks will continue as the week goes on with a number of other countries, with the EU the next to push for an exemption. This is likely to be a huge topic of conversation when EU finance ministers meet on Tuesday.

US Macro Data

As the week rolls on, apart from finding out just how deep the fear runs over Trump’s tariff plans at the EU finance ministers meeting on Tuesday, there is likely to be a focus later in the week on US macro data as Tuesday has the CPI readings released. Ahead of next week Fed rate decision, inflation will, of course, be closely watched, and remains a key battleground and sticking point on a decision to hike rates either three or four times in 2018. Expectations remain well above 95% for a rate hike at the meeting next week, but a reading tomorrow away from expectation will cause some US dollar, and US bond yield movement as the market yet again shifts its sentiment.

The Cost of Living Question

Last week’s US jobs report showed a bumper reading on the Non-Farm Payroll number with a huge 330K new jobs created. However, we saw a subdued average hourly earnings number as it dropped to just 0.1% MoM. With inflation forecasts expecting the CPI reading to be at the 2.5% target by the end of the year, if wage growth remains stagnant it will yet again bring the cost of living question back to the US, something that could well slow the Fed down on its policy tightening plans.

The calendar looks a little quiet for the start of the week, with very little due for release this afternoon. This could leave traders looking back at last week’s jobs data for some early moves. It’s a bit of mixed picture on the major currency pairs this morning, with the dollar moderately lower across the board. US and European stock futures are all showing green numbers so far with European indices up moderately, on what is a rather subdued start to the trading week.

This article was written by James Hughes, Chief Market Analyst at AxiTrader

Markets Trumped, Dollar crumbles

The European Union was swift to fight back, threatening to slap tariffs on American products if Trump went ahead with his plans. The Dollar crumbles in responses and stock markets tumbled while Gold, ever the safe haven of choice, shines again.

Risk aversion might have been the name of the game during this week, but investors shook off that negativity come Monday morning. The markets left more than a few commentators scratching their heads as a risk-on mood saw a strong bounce in the Dow Jones, S&P 500 and European markets. Concerns of a global trade war eased, with many speculating that Trump’s last Thursday proposal was a negotiating tactic and not a series suggestion. The President himself later confirmed that the tariffs could be dropped if the U.S negotiates a “new and fair” NAFTA agreement. Reports from those close to the Oval Office also suggest Trump is under pressure from all quarters – his allies included – to drop the tariffs. Another factor likely to have contributed to this week’s upside.

With the outcome far from predictable, investors should remain diligent. Financial markets are still highly reactive to tariff developments and a well-timed presidential tweet or press conference would likely see them flounder once again. Major US trade partners, specifically the EU, have been vocal in their intention to impose similar sanctions should Trump go ahead with his plan, another development investors will need to monitor closely.

While Monday and Tuesday’s period of relief and calm may continue supporting stock markets, overall uncertainty still has the ability to limit upside gains.

Dollar calms before the storm

The Dollar could become a battleground for bulls and bears as market players juggle with the conflicting fundamental themes driving the currency.

On one side of the equation, bulls remain supported by expectations of higher US interest rates thanks to Federal Reserve Chair, Jerome Powell. Powell’s debut congressional appearance last week has fueled market speculation that we may see as many as four US rate hikes this year. On the other side of the coin, the bears still have everything to play for and the threat of a trade war continues to put pressure on the Dollar.

The main event risk for the Dollar this week will be Friday’s NFP report, which could offer fresh insight into the health of the US labor markets. A strong NFP print, accompanied by signs of wage growth, may boost market expectations of higher US rates.

The Dollar Index is likely to benefit from such an outcome with prices potentially venturing higher. Speaking of the Dollar Index, prices have broken back below the 90.00 level. Sustained weakness below 90.00 could encourage a decline towards 88.50. Alternatively, a move back above 90.00 would invite an incline towards 90.55 and 91.00, respectively.

 For more information, please visit ForexTime

So What is Trumponomics?

America chose Donald Trump, a billionaire businessman to be the 45th president of the United States, a man of the people, the one who should lead the country and be the leader of the free world.

Since Trump spread out his policies, economists and experts vilifying Trump and scorning his views. A closer look at his speeches and statements reveals that there is a reasonably consistent worldview known as Trumponomics and it is not at all stupid.

Trumponomics describes the economic policies of the US president-elect-Donald Trump. It is an old-fashioned fiscal policy that targets to pump economic growth, a changing phenomenon after years of monetary policy rules economic fields.

Although Trumponomics is still a vague term, the plan forms itself in three main elements: Big tax cuts, immigration reform, and protectionist measures. Firstly, Trump convinced US citizens to lower their tax burden. Corporate tax – according to Trump – will be decreased from 35% to 15%, then his plan continues as he will simplify income tax to only three brackets (10%, 20%, and 25%) and last, to enforce estate tax repeal. All of these actions will lower tax rates for all classes, individuals, and Businesses.

The second element of Trump will be a tighter immigration policy that includes the deportation of unauthorized workers. More precisely, 11 million undocumented immigrants. According to Homeland Security, the enforcement division has the capacity to remove roughly 400,000 immigrants in a year. Trump’s plan to deport 11 million in just two years seems unreal and inhuman.

In addition, Trump’s has proposed to build a wall along the Mexican border. The cost of a wall is affordable and possible to build. However, the wall across the border will be a challenge to build as public pressure will set the tone.

The last element is the so-called protection measures. That is the most concerning element of Trump’s plan, both for the US and Global economy and politics. Trump has more to lose taking a protectionist path. Critics claim that the plan can isolate the US economy by provoking a trade war with emerging countries, including Canada, Mexico, and China.

Trumponomics is still a cloud of uncertainty. We must admit that with all the concerns Trumponomics contain, it has a sense of change. We all have to wait and see whether Trump’s statements can come true.