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With trade at the top of the agenda, expectations for a smooth running G7 Summit were low even before the meeting started. A
Asian stocks were shaky after the G7, or more appropriately G6 +1, Summit fanned fears that a global trade war is inevitable as long as Trump continues to play the protectionist card. Traditional safe havens such as the Japanese yen and gold climbed sharply higher, whilst investors were moving out of the dollar and
NAFTA Looking More Elusive
The Canadian dollar is a notable loser following the new low in US – Canadian trading relations. USD/CAD gapped higher on the open on Sunday hitting $1.2999, up from a close the previous week at $1.2922, as investors acknowledge that NAFTA negotiations will almost certainly have a much harder edge to them following Trump’s early departure from the G7 Summit and castigating tweets aimed at Canadian Prime Minister Trudeau. With no high impacting Canadian data due until Thursday, we expect the pair to remain vulnerable to further trade headlines and the dollar to be in the driving seat.
With plenty for dollar traders to be keeping an eye on this week, attention will start to shift towards the US - North Korea Summit on Tuesday. Whilst both sides are seeking to manage expectations, the fiery tempers of each leader
Italy Intends to Stay in the Euro
The euro was seen extending gains from the previous week, capitalising on the weaker dollar whilst benefitting as the new Italian finance minister Giovanni Tria sought to reassure the markets by confirming that he backs staying in the euro and intends to bring down Italian debt.
After hitting a 10-month low just 10 days ago, the euro is once again better bid. Headwinds such as Italy exiting the euro and the ECB quantitative easing programme are evaporating allowing optimism towards the euro to return with force. EUR/USD pushed over $1.18 as the markets opened on Sunday and as traders look ahead to the ECB meeting on Thursday, where it is widely believed that the central bank will plan to end the QE programme in December after a 3-month taper.
Mixed Bag for UK Data?
After a quiet UK economic calendar for the second half of last week, pound traders will be pleased to see UK economic releases pick up again this week. Whilst today’s manufacturing and industrial production figures are expected to show a mixed bag, the NIESR GDP data is expected to show that economic growth picked up. Should this be the case, combined with the weaker dollar we could finally see the pound make an approach towards $1.35.
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Trading on Wall Street was lacklustre, with the S&P moving between small gains and losses before moving lower into the close. News that a meeting between President Trump and China’s President Jinping Xi was being pushed back into April served to dampen dem…Read more