Macro economics

Analytics on 11/06/2019. Stocks climb despite Trump’s new threats

European stocks are trading higher on Tuesday despite U.S. President Donald Trump said that immediate tariffs would be imposed on a further $300 billion of Chinese goods if President Xi does not attend this month’s G-20 meeting. The market sentiment is still supported by the fact that the U.S. suspended its proposed tariffs on Mexican imports. On the data front, the report from the U.K. showed wages in the three months to April beating forecasts while employment growth slowed, while the jobless rate held at its lowest rate since 1975.

Against this backdrop, the UK’s FTSE 100 adds 0.46 per cent to 7409, Italy’s FTSE MIB rises by 1.00 per cent to 20,689, France’s CAC 40 is up 0.76 percent to 5,423, while German DAX 30 adds 1.21 per cent to 12,190. US stock index futures are rallying early Tuesday morning despite comments from Trump on trade war with China.

EURUSD is trading marginally higher after a dip yesterday and tries to stay above the 1.13 threshold. The pair struggles for direction at this stage amid market uncertainty over the trade tariffs and the prospects for the US monetary policy. Despite the bullish bias, euro struggles to regain a sustainable upside momentum. The next major event for the pair is the US CPI report due tomorrow. Should the figures disappoint, the selling pressure on the greenback will increase. In this scenario, the pair could challenge the 1.1350 area amid growing expectations of a Fed rate cut as early as next week. The immediate support comes around 1.13.

USDJPY is on the rise as risk sentiment improved and weakened the safe-haven yen demand. However, the pair still struggles to get back above the 109.00 figure, which reflects the uncertainty over the prospects for further dollar dynamics in the context of recent Fed’s dovish comments and weak economic data from the US. Technically, as long as the greenback remains below the mentioned local resistance, the downside risks persist. The immediate support lies in the 108.30 area.

Brent crude is flat on the day as the barrel struggles for direction after failed bullish attempts yesterday. The prices lacked the upside impetus to challenge the $63 barrier and turned flat. The market remains relatively stable due to hopes that producer cartel OPEC will extend supply cuts. The Organization of the Petroleum Exporting Countries meeting will take place on June 25-26, when it decides its output policy for the rest of the year. ON the other hand, traders continue to express concerns over global demand and rising output in the U, which prevents Brent from showing a more sustainable bullish phase after the latest sell-off.

Nathan Lambert, Head of Global FX Analytical Department

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Interest rates

Country Rate Value
USA Federal Funds 0,25 %
Switzerland 3 Month LIBOR Range -0.75 %
United Kingdom Repo Rate 0,10 %
EU Refinancing Tender 0,00 %
Japan Overnight Call Rate -0,10 %
New Zealand Official Cash Rate 0,25 %
Australia Cash Rate 0,25 %
Canada Overnight Rate Target 0,25 %
All rates
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