Morning Commentary: The Other Fish in the Sea

A daily summary and commentary of events and factors that affect the global markets, with a particular emphasis on the foreign exchange markets.

Header Share this story: Alan Rose Foreign Exchange Senior Trader

Global equities are taking a breather today from the euphoria that has been driving them higher in June, primarily propelled by the hope and promise of lower U.S. and global interest rates. The global interest rate market does not share the same confidence about the future sustainability of the U.S. and global economy as G7 interest rates continue to be suppressed and remain near their most recent lows. As for the U.S. dollar (DXY) today, the DXY index has stabilized after four straight days of declines.   We spend a lot of time analyzing the impact interest rates, equities, and commodity prices have on the U.S. dollar (DXY) and the impact the U.S. dollar has on these other mainstream asset classes. As G7 interest rates have collapsed over the past weeks and geopolitical tensions have risen in the Middle East, two other investments have been on the move and have been rising sharply.   One traditional safe haven investment during times of uncertainty is gold. Gold has been on the march and is up for the sixth day in a row. It is at or near six-year highs fueled by lower G7 interest rates, a weaker U.S. dollar, and an increase in Middle East tensions. The other investment that has been on the march higher is Bitcoin. Bitcoin had a meteoric rise in 2017 only then to collapse. Bitcoin prices hit their lowest in the beginning of this year, but starting in March they began to rise and have since almost tripled and are higher for the fifth day in a row.   It is somewhat understandable that other types of investments are attracting investment flows during these uncertain times.  The simultaneous rise of gold and Bitcoin will need to be monitored as market indicators of investor’s need to find alternatives when uncertainty and a lack of confidence is on the rise. HERE ARE THE KEY NEWS STORIES FROM OVERNIGHT: U.S. home prices measured by the S & P Case-Shiller National Home Price index came in mixed for the month of April. Compared to April 2018, national home prices rose by 3.5% in April, which was down from the 3.7% rise in March. However, the 10-city composite index rose 2.3% YoY up from the 2.2% rise in the March. Las Vegas saw the sharpest price increases with gains of 7.1% followed by Phoenix with a gain of 6.0%.

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:

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 NMLSR ID# 536994 | City National Bank Member FDIC