A daily summary and commentary of events and factors that affect the global markets, with a particular emphasis on the foreign exchange markets.
Markets on Hold for Now
Share this story:
Alan Rose Foreign Exchange Senior Trader
As we arrive this morning, most major assets classes remain range bound as investors and traders look for near term direction ahead of the key G20 meeting in Japan this weekend. While equity markets have had a great run in June and remain cautiously optimistic that President Trump and President Xi from China will jump start the stalled trade talks, U.S. and G7 interest rates continue to indicate an ongoing concern about a global slowdown and a U.S. slowdown (see below) as interest rates consolidate near recent lows.
With regards to the U.S. dollar (DXY), the DXY index has temporarily stabilized after falling sharply after last week’s FOMC meeting and another sharp leg down in U.S. interest rates across the yield curve. While many key major currencies have continued to trade over the same turf over the past few days, commodity-linked and emerging market currencies have remained better bid.
Market participants should be prepared for a continued barrage of tweets from President Trump on a wide range of topics as he and the White House continue to address what they see as unfair trade imbalances. Market participants should continue to expect the White House putting forth the “America First” agenda this weekend and well after the G20 meeting which will continue to keep all of us who watch markets on our toes.
HERE ARE THE KEY NEWS STORIES FROM OVERNIGHT:
EZ Consumer Confidence for the month of June fell sharply and well below expectations at 109.6 from 111.8 in May. This was the lowest level of confidence since 2016. The euro weakened initially but got a small boost from higher-than-expected German CPI data. The euro traded in a narrow range and is currently sitting in the middle of that range.
The U.S. economy grew at a very healthy 3.1% in Q1 which was revised slightly lower from the original release. Q4 GDP remained at 3.1%, but many economists are forecasting sub-two percent growth in Q2. Personal Consumption data within the report was weaker than forecast at 0.9% against expectations of a gain of 1.3%. The net result after the release of this report is that U.S. interest rates are fractionally lower on the session and U.S. equities are opening mixed.
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.
Tune in for a guide to ETFs and investing strategies for potential long-term success. View in a browser Fidelity Fidelity Log in Creating a portfolio with ETFs: Why and how Creating a portfolio with ETFs: Why and how