iFOREX | Sep 17, 2018 05:37AM ET
Continued concerns about the trade standoff between the US and China could be one factor driving the Dollar higher after last week low in the US Dollar Index (USDX) on Friday morning.
The stronger Dollar and also higher yields on bonds contributed to gold falling again below the $1,200 level. The 10 Year US Treasury Note yielded for the first time in more than a month over 3%. As both Treasury Notes and gold are seen as safe-haven assets, in theory it is assumed that higher yields on Treasury Notes make the non-yielding gold less attractive to investors.
Equity indices traded lower on Monday, as especially Asian stocks were again seen falling after reports that US President Trump still intends to levy additional tariffs on $200 bn. worth of Chinese imports, despite possible ongoing negotiations.
Cryptocurrencies continued trading at lower volatility with Bitcoin trading marginally below $6,500 and Ethereum staying firmly above $200 over the weekend. Meanwhile one of the key cryptocurrency exchanges Binance is set to open its exchange now also in Singapore, after announcing exchanges in different European and African countries.
On Monday in Italy the Merchandise Trade and in the European Union the Harmonised Index of Consumer Prices (HICP) statistics will be released. In the US the Empire State General Business Condition survey will be published.
For emerging markets Turkey publishes its Budget Balance for August, in Brazil the central bank releases its Focus Market Report, and Russia discloses its Industrial Production level.
In the Asian-Pacific trading session on Tuesday the Bank of Japan will announce its interest rate decision and in Australia the Housing Price Index will be released.
EUR/USD
On Friday economic data from Italy showed a lower inflation than expected with the CPI at +1.6% y/y (expected +1.7%). The Trade Balance deficit level increased to €17.4 bn. in July.
In the United States prices were also seen rising slower than expected with Import Prices at -0.6% m/m (expected -0.1%) and Export Prices also lower at -0.1% m/m (expected +0.2%). While Capacity Utilization was lower than expected at 78.1% in August (expected 78.3%), the University of Michigan Consumer Sentiment was unexpectedly up at 100.8 (expected 97.0).
On Monday in Italy the Merchandise Trade and in the European Union the Harmonised Index of Consumer Prices (HICP) statistics will be released. In the US the Empire State General Business Condition survey will be published. Also on Monday, the member of the Executive Board of the European Central Bank, Yves Mersch is due to deliver a speech.
USD/ZAR
The South African Rand (ZAR) traded stronger last week, supported by the positive sentiment in emerging markets, following the interest rate decision in Turkey and also by indications by the rating agency Moody’s, that it would likely not downgrade its credit rating for South Africa. Moody’s is the last remaining credit rating agency giving South Africa an investment grade rating.
However there is continued uncertainty how the controversial proposed land reforms would be implemented, as policymakers face pressure to deliver on promises ahead of the 2019 general election.
Many analysts see it as likely that the South African Central Bank would raise its interest rates by 25 basis points from the current 6.5% rate at its meeting on Thursday. On Wednesday before the Central Bank meeting, Consumer Price Index (CPI) data for August is expected.
WTI Oil
Oil had another volatile trading day on Friday, closing the week overall lower. Multiple factors moved the oil prices that week. On one had data from the API and EIA surprised most of the market participants as the draw on stockpiles was bigger than anticipated. Also the situation regarding the trade standoff between the US and China, which could have potential to slow down global economies seems unclear. Only last week signs of possible reconciliation appeared with both parties interested in talks, while later it emerged that US President Trump is still intending to levy new tariffs on Chinese imports.
On Tuesday the American Petroleum Institute (API) will release oil stockpile figures, followed by the Energy Information Administration (EIA) on Wednesday.
US 500
US equity indices closed almost unchanged during the regular trading session on Friday, but then extended losses in the late trading with especially utilities (US Utilities ETF -0.48%) and real estate (US Real Estate ETF -0.69%) stocks trading lower. Most gains were seen in chipmakers’ stocks (US Semiconductors ETF +1.22%) with sector stocks recovering from the low seen on Wednesday.
Snap (-0.43%) continues to trade close to its all-time low and closed last week for the sixth consecutive week lower. Snap, the company of the popular social media app ‘Snapchat’ is under pressure due to slower than expected growth, declining active user numbers and departure of key executives.
Adobe (NASDAQ:ADBE) (+2.45%) stocks traded at an all-time high after the company accounted better than expected quarterly results, clearly surpassing revenue and earnings estimates as the company’s digital media segment revenue hit a new record gaining 28% compared to the previous year.
Few earnings are expected for this week with Micron expected to release its earnings on Thursday.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.