We saw a similar open on Wall Street with investors taking note of the most recent escalation in the US-China trade dispute. Safe-haven assets have risen meanwhile with Treasuries, core European bonds and the Japanese Yen all trading higher.
Elsewhere in FX, the Dollar Index is ahead with little reaction shown to mixed housing data released this afternoon – housing starts beat buy building permits missed. The Australian Dollar is at the bottom of the G10 pile amid rising trade tensions while Sterling struggles on the ongoing Brexit related uncertainty.
We did hear from the ECB’s Nowotny said they are starting the exit from expansive monetary policy. Dallas Fed President Kaplan meanwhile said the negative impact of higher oil prices on GDP growth is likely to be more muted than in the past.
Staying with oil, US crude futures extended earlier losses to over two-percent at the lows as Russian Energy Minister Novak said he plans to propose increase oil output by +1.Mln BPD at the OPEC+ meeting.
US Closing Report
Industrial and material stocks are leading declines following the recent escalation of the US-China trade dispute. Of note, White House Trade Advisor Navarro has said none of the Trump administration’s effort to negotiate with China have yielded progress on changing their predatory trade practises.
US government bond yields have also dropped amid the flight to quality with the ten-year down three basis points at 2.89%. The US Dollar has still gained in currency space meanwhile but had to settled for second place in the G10 race as the Yen saw broad gains.
Turning the oil markets, US crude futures settled at $64.90 (-$0.79). The Kuwait Energy Minister said there are still no specific scenarios for raising or lowering the OPEC production ceiling while the Iranian Oil Minister said he does not think an agreement will be reached at this OPEC meeting.
We also heard from the ECB’s Lane said they would need a sizeable inflation shock to reverse the decision on QE.
Trading carries a high level of risk to your capital and may result in losses that exceed your initial deposit. You should first be aware of the risk and know what you do before you proceed with trading. Supplied information is not advice.