Morning Commentary: Like Putting Lipstick on a Pig

Foreign Exchange - Morning Commentary

Like Putting Lipstick on a Pig

Share this story:
Facebook
Twitter
LinkedIn
Email
Alan Rose
Alan Rose
Foreign Exchange Senior Trader
Markets are on a mild “risk on” mode today but off of their best levels as the markets have reacted to statements from U.S. Treasury Secretary Mnuchin. Regarding the progress on the U.S. – China trade talks, Secretary Mnuchin was quoted as saying “we were about 90% of the way there” which provided a short term catalyst for higher equity and commodity prices as well as interest rates. However, many investors remain skeptical and the Mnuchin quote today is being seen as more political spin on issues that still deeply divide the two countries.
 
Long term investors remain hopeful that President Trump and President Xi will find a way to jumpstart the stalled talks at this weekend’s G20 meeting.  But the impasse between the two countries on key issues regarding technology and technology transfers and other key issues remains divisive. There are many skeptics who believe that the critical issues that have divided the two key countries will require much more time to resolve and will continue to have a negative impact on the global economy.
 
My own personal take on this weekend’s meeting is that both President Trump and President Xi will provide a great photo op with both shaking hands and smiling and agreeing to continue the dialogue to bridge the divide between the two countries. I am more skeptical that more time and more pain might be involved before common ground is found and that Secretary Mnuchin’s quote this morning is just political spin.
HERE ARE THE KEY NEWS STORIES FROM OVERNIGHT:
  • The Reserve Bank of New Zealand kept interest rates on hold as expected at 1.50%. Post meeting commentary stated that perhaps more interest rate cuts would be needed “over time”. Markets shrugged that headline off as the Mnuchin comments carried the day as investors and traders remain hopeful for jump-start to the stalled trade talks. The Kiwi is the top performing major currency today along with many other commodity linked currencies.
  • U.S. Durable Goods orders for May came in mixed today. The headline number was disappointing as it fell below consensus forecasts of -0.3% to -1.3% with April’s data revised lower. But the category of non-military capital goods excluding aircraft rose by 0.4% which was much better than expected. U.S. interest rates ignored the headline data and are higher on the session.
If we can help you with any Foreign Exchange needs, please email foreignexchange@cnb.com or call (800) 447‑4133.
Want to learn more about international finance, economics, and global events? Sign up for our other Foreign Exchange emails and videos!
Follow City National Bank on social media:
Facebook Twitter LinkedIn Google Plus YouTube
Non-deposit investment products:
Are not FDIC insured,
Are not deposits or other obligations of City National Bank and are not guaranteed by City National Bank, and
Are subject to investment risks, including possible loss of the principal invested.
This report is for general information and education only and was compiled from data and sources believed to be reliable. City National Bank does not warrant that it is accurate or complete. Opinions expressed and estimates or projections given are those of the authors as of the date of the report with no obligation to update or notify of inaccuracy or change. This report is not a recommendation or an offer or solicitation to buy or sell any financial instrument discussed. It is not specific investment advice. Financial instruments discussed may not be suitable for the reader. Readers must make independent investment decisions based on their own investment objectives and financial situations. Prices and financial instruments discussed are subject to change without notice. Instruments denominated in a foreign currency are subject to exchange rate and other risks. City National Bank (and its clients or associated persons) may engage in transactions inconsistent with this report and may buy from or sell to clients or others the financial instruments discussed on a principal basis. Past performance is not an indication of future results. This report may not be reproduced, distributed or further published by any person without the written consent of City National Bank. Please cite source when quoting.
Unsubscribe from this list  |  Update email preferences
This message has been sent to bank@banking.offers.report. Please do not reply to this email. To ensure the delivery of future emails, please add foreignexchange@emails.cnb.com to your email address book or safe sender list.
Copyright ©2019 City National Bank – All Rights Reserved.
350 South Grand Avenue, 12th Floor, Los Angeles, CA 90071
City National Bank is a subsidiary of Royal Bank of Canada.
TERMS & CONDITIONS  |  PRIVACY STATEMENT
Equal Housing Lender
NMLSR ID# 536994 | City National Bank Member FDIC
                                                           

Comments

Popular posts from this blog

Fidelity: Bollinger band stock signal