FxPro Financial Services Ltd | May 31, 2018 02:55AM ET
Reports in the Washington Post today are suggesting that US President Donald Trump plans to announce metal tariffs on Mexico, Canada and Europe set to come into force as early as tomorrow. The deadline for the EU’s relief from US tariffs expires tomorrow, June 1st. There has been a muted market reaction to the rumour but should it be officially announced volatility can spike higher as a result. USD/MXN did react by selling off from 19.82115 to 19.71140.
The Italian President has told the Populist election winners that he is ready to engage with them when they are ready. This has given the Five Star Movement and League parties a second chance at attempting to form a government. The parties heavily criticised the President after he blocked their earlier cabinet nominations. Stocks were higher yesterday as Treasury yield rose with an easing in concerns when the Populist parties insisted that they have no plans to force Italy to leave the Euro or create an Italexit of the EU. EUR/USD rallied from lows around 1.15000 to 1.16550 while the Italian stock market gapped higher from 21060.00 to close at 21855.00.
German Harmonised Index of Consumer Prices (YoY) (May) was 2.2% against an expected 1.8% from a prior reading of 1.4%. Harmonised Index of Consumer Prices (MoM) (May) was 0.6% against an expected 0.3% from a previous -0.1%. This data beat the previous reading on a yearly basis, bringing the data back in line with the high from early 2017. The beat in the monthly reading brings that data back above zero. EUR/GBP sold off from 0.87571 to 0.87320 following this data release.
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