Global stocks pushed higher as Trade War rumors go down

U.S. President Donald Trump faced increasing pressure from political and diplomatic allies to pull back from proposed steel and aluminium tariffs, helping soothe investor nerves about an imminent trade war. Mr Trump earlier alarmed his Nafta partners, who had been hoping for an exemption from the planned tariffs on steel and aluminium, by tying that explicitly to a deal. “We have large trade deficits with Mexico and Canada. NAFTA, which is under renegotiation right now, has been a bad deal for USA. Massive relocation of companies & jobs. Tariffs on Steel and Aluminium will only come off if new & fair NAFTA agreement is signed,” he tweeted on Monday.

But next day on Tuesday he has been forced to back off on the stance.

Facing growing pressure from political and diplomatic allies to pull back from proposed steel and aluminium tariffs, helping soothe investor nerves about an imminent trade war, Trump showed some willingness to be flexible on the issue.

Realising that the situation is far from being grave, worries have dissipated slightly and markets moved up on Tuesday.

Asian shares rallied, with gains in the region led by Japan’s benchmark Nikkei, which ended up 1.8%, after hitting its lowest closing level since October a day earlier.

In Europe, pan-European Stoxx 600 index, the region’s broadest measure of share prices, rising around 0.8%, with all sectors in the green.

On Wall Street, U.S. stock futures inched higher – Dow futures were up 70 points, or nearly 0.3%, from their Monday close, while S&P 500 futures tacked on 6 points, or about 0.2%, and Nasdaq 100 futures rose 28 points, or roughly 0.4%.

Sources: 

https://www.investing.com/news/economy-news/top-5-things-to-know-in-the-market-on-tuesday-1326496

https://www.investing.com/news/stock-market-news/paper-stocks-autos-drive-european-shares-higher-1326401

https://www.fxstreet.com/analysis/markets-sigh-relief-on-korea-trump-201803061419

https://www.ft.com/content/ff6123b2-2078-11e8-9efc-0cd3483b8b80

https://www.ft.com/content/496f1036-1e3f-11e8-aaca-4574d7dabfb6

 

Italian election results and Trump’s trade wars dominate market`s mood on Monday

Both Italian election results and Trump decision to impose higher tariffs on steel and aluminium are impacting the markets on EUR and USD currency pairs on Monday.

Global equities were mixed in cautious trade, as investor nerves remained on show.

The EUR/USD is trading around $1.2300, slightly lower on the day. The Italian elections resulted in big gains for populist parties and the composition of the next government is unclear. The euro septic Lega will probably be in government and this slightly weighs on the euro. Five Star, led by 31-year-old Luigi Di Maio, was one of the big winners and appeared on course to be Italy’s strongest single party with 32 per cent of the vote. Although it cannot form a government unless it strikes an alliance with other parties, it has positioned itself as a dominant force in Italian politics.

The euro was up 0.1% at $1.2331, erasing all of its losses after sliding to a session low of $1.2155. Against the yen, it was unchanged at 130.25, recovering after hitting an intraday low of 129.36, its lowest level since late August.

However, Germany will finally have a government and Trump’s tariffs weigh on the US Dollar against the majors. U.S. stocks logged hefty losses last week, with the Dow dropping around 3%. Trump is expected to finalize the tariffs – 25% on steel and 10% on aluminum – later in the week, posing a tough challenge for U.S. Trade Representative.

The USD/JPY is trading a bit lower, around ¥105.50, stuck above the lows of ¥105.25 recorded last week.

Sources: 

https://www.investing.com/news/economy-news/top-5-things-to-know-in-the-market-on-monday-1324224

https://www.investing.com/news/stock-market-news/sp-dow-futures-lower-as-trade-war-fears-dominate-1324454

https://www.investing.com/news/

https://www.ft.com/content/e6a89252-1ffa-11e8-a895-1ba1f72c2c11

https://www.fxstreet.com/analysis/eur-usd-forecast-ignoring-italy-trumping-on-looking-for-a-new-direction-201803050927?utm_source=NLsession&utm_medium=email&utm_content=hot-story-headline&utm_campaign=america-newsletter

https://www.fxstreet.com/testing/home-with-tabs?utm_expid=.7yoibMg6Tc-Z6LTNNM39OQ.1&utm_referrer=https%3A%2F%2Fwww.fxstreet.com%2Fanalysis%2Feur-usd-forecast-ignoring-italy-trumping-on-looking-for-a-new-direction-201803050927%3Futm_source%3DNLsession%26utm_medium%3Demail%26utm_content%3Dhot-story-headline%26utm_campaign%3Damerica-newsletter

https://www.fxstreet.com/currencies/usdjpy

 

This week ahead: top news to watch this week

Fellow traders, let us have a look at upcoming week in terms of important economic news.

Below you can find short table of major economic news during this week:

Monday: UK Services PMI: A survey on Britain’s giant services sector due at 0930GMT (4:30AM ET) on Monday is forecast to inch up to 53.3 from the previous month’s reading of 53.0. China’s annual two-week long National People’s Congress commencing on Monday will also grab some attention. The political meeting is used by leaders to set policies for the year and detail plans to curb financial risk, air pollution, and excess industrial capacity.

Tuesday: USD Factory Orders (MoM) (Jan): The advance durable goods orders report from the Census Bureau of USA impacting USD values. Tuesday will also bring us AUD RBA Interest Rate Decision

Wednesday: EUR Gross Domestic Product s.a.

Thursday: European Central Bank Policy Meeting: President Mario Draghi will hold what will be a closely-watched press conference 45 minutes after the rate announcement. How he views signs of undershooting inflation and any clues on when the central bank plans to end its €2.5 trillion stimulus program will be important. China Trade Figures for February will be released on Thursday as well. Exports are forecast to have climbed 13.9% from a year earlier, following a gain of 11.1% in the preceding month, while imports are expected to rise 9.7%, after soaring 36.9% in January.

Friday: The U.S. Labour Department will release US Employment report. The consensus forecast is that the data will show jobs growth of 204,000, after adding 200,000 positions in January, while the unemployment rate is forecast to dip to a 17-year low of 4.0% from 4.1%.

Sources: 

https://www.investing.com/news/economy-news/economic-calendar–top-5-things-to-watch-this-week-1323555

https://www.ft.com/content/1140bade-2010-11e8-a895-1ba1f72c2c11

https://www.ft.com/markets

https://www.fxstreet.com/analysis/week-ahead-italian-election-central-banks-and-us-jobs-in-focus-201803042347?utm_source=NLsession&utm_medium=email&utm_content=also-happening-2-headline&utm_campaign=weekahead-newsletter

https://www.fxstreet.com/news/key-events-for-the-week-ahead-nomura-201803042355?utm_source=NLsession&utm_medium=email&utm_content=hot-story-headline&utm_campaign=weekahead-newsletter

https://www.fxstreet.com/economic-calendar?utm_source=NLecocal&utm_medium=email&utm_content=cta-button-1&utm_campaign=eco-cal-weekly-schedule&utm_source=NLecocal&utm_medium=email&utm_content=cta-button-1&utm_campaign=eco-cal-weekly-schedule

https://www.investing.com/economic-calendar/

https://www.investing.com/news/world-news/italy-elections-deliver-hung-parliament-gridlock-exit-polls-1323524

 

Daily major currency pairs overview shows the strongest Dollar and weakest Pound

USD remains the strongest currency across the board. Dollar remains broadly supported after Fed Chair Jerome Powell reiterated on Tuesday that the U.S. central bank would likely move forward with gradual increases in interest rates. Today’s good US economic releases also supports strong USD.

USD/JPY jumps to fresh session tops, eyeing a move beyond 107.00 handle. Currently The US dollar is heading for its second-best monthly performance of the Trump presidency as investors pencil in the possibility of additional interest rate rises this year. The dollar index was up 0.3% to 90.604 on Wednesday which leaves it 1.7% higher for February, on track for its best month since November 2016 when Mr Trump was elected president.

The U.S. 10-year Treasury yield stood at 2.841%, continuing to move away from a four-year high of 2.957% reached last week.

The euro slumped to its worst level since Jan. 18 at $1.2180, hurt by political uncertainties as Italians are preparing to vote in a national election on Sunday.

The British pound fell to $1.3727, its lowest since mid-January, pressured by renewed worries over Brexit after British Prime Minister Theresa May said the EU’s draft legal text published on Wednesday would undermine Britain and threaten its constitutional integrity.

Sources: 

https://www.fxstreet.com/currencies/us-dollar-index#latestnews

https://www.ft.com/markets/currencies

https://www.ft.com/content/7a24997e-1cb6-11e8-956a-43db76e69936

https://www.investing.com/rates-bonds/u.s.-10-year-bond-yield

https://www.investing.com/quotes/us-dollar-index

https://www.investing.com/news/forex-news/forex–dollar-at-6week-highs-on-us-rate-hike-hopes-1318871

https://www.investing.com/news/economy-news/top-5-things-to-know-in-the-market-on-thursday-1318883

 

God Save The Queen: GBP goes down to near 3-week low after May criticizes EU Brexit proposals

Today`s news are all about UK. UK Prime Minister May has hit out at Brussels’ first draft of a Brexit treaty, sending GBP to sink waters to near 3-week low.

Sterling fell as much as 1% to $1.3772, weakest level since February 9. Today’s decline takes its loss for the month to nearly 3 per cent — the most since October 2016. The GBP/USD is now trading within broad bearish trend channel sloping downwards and the pair needs to break below 1.3737 support line represented by 38.2% Fibonacci retracement line of the upmove from 1.2770 to 1.4343 to confirm further weakness.

The UK domestic data front is not helping Pound a lot with the UK manufacturing PMI decelerating to 55.2 in February, although it came out a bit better than expected.

The move lower comes after Mrs May rejected a EU proposal that could keep Northern Ireland under the bloc’s rules, saying no UK prime minister could “ever” accept such a plan. The comments set Mrs May on a collision course with Brussels and rekindled market fears over a so-called “hard Brexit” that would see the UK leave the EU without a deal in place that would give it and its companies access to the bloc’s single market.

Elsewhere in EU moods are not setting high.

European markets are following Wall Street down after a rough Wednesday which saw the S&P 500 lose 1.1%t, leaving it 3.9% lower for February and marking the biggest monthly decline since January 2016. Overnight, Asian markets were mixed but China benchmarks were up after positive manufacturing data. Briefly all things look like this:

  • London’s FTSE 100 is 0.1% lower
  • Pan-European Euro Stoxx 600 index is down 0.3%
  • Frankfurt’s DAX is down 0.5%
  • Tokyo’s Topix closed down 1.6%

Sources: 

https://www.ft.com/markets

https://www.ft.com/content/6877f7fe-1cf0-11e8-aaca-4574d7dabfb6

https://www.ft.com/content/51190c1e-1c6f-11e8-956a-43db76e69936

https://www.ft.com/content/f815edda-1ca0-11e8-956a-43db76e69936

https://www.ft.com/content/127d054a-1d15-11e8-aaca-4574d7dabfb6

https://www.ft.com/content/3b28cd0c-1ca3-11e8-aaca-4574d7dabfb6

https://uk.investing.com/news/economy-news/brexit-advances-at-wto-as-britain-sets-out-new-services-terms–diplomats-1059305

https://uk.investing.com/news/stock-market-news/european-shares-drop-as-carrefour-wpp-results-get-frosty-reception-1060510

https://www.fxstreet.com/analysis/gbp-usd-forecast-sterling-hammered-lower-by-brexit-draft-further-downside-limited-201803010935

 

Global stocks set to reach three-month low after turbulent February but USD jumps to five-week high

Global equities are on track to end February down 3.5%, their first monthly loss since October 2016. That`s the reaction of markets to U.S. Federal Reserve chair Jerome Powell, who said on Tuesday that recent data had strengthened his confidence on inflation, prompting traders to raise bets that the Fed will squeeze in a fourth rate hike this year.

U.S. stocks suffered their biggest daily drops since a selloff three weeks ago, with the Dow Jones industrial average falling nearly 1.2%, or about 300 point

In Europe, nearly all the continent’s major bourses traded in negative territory in mid-morning trade. The Stoxx Europe 600 index, the region’s broadest measure of share prices, fell around 0.4%, with most sectors in the red. Germany’s DAX performance index slipped 0.18% by mid-day in Frankfurt while Britain’s FTSE 100 was marked 0.38% lower in London.

World stocks were also set to snap a record 15-month winning streak due to data signaling a slowdown in China’s manufacturing and Japan’s industrial output.

Sentiment toward the mining sector and China’s stocks took a knock after the country’s official gauge of manufacturing managers’ growth expectations came in at a 20-month low, falling to 50.3 in February — down a full point from January and its largest fall in more than six years.

European mining stocks are also lower after the Chinese data, with the Stoxx mining stocks down 1.5%.

Dollar jumps to five-week high, though. U.S. dollar rose to its strongest level in more than five weeks, boosted by bets that the Fed could increase interest rates as many as four times this year.

Sources:

https://www.ft.com/content/a67bd056-1c24-11e8-956a-43db76e69936

https://www.investing.com/news/stock-market-news/wall-street-on-course-for-february-loss-first-in-10-months-1316607

https://www.thestreet.com/story/14503821/1/global-stocks-extend-declines-as-investors-cast-hawkish-hue-on-powell-testimony.html

https://www.thestar.com.my/business/business-news/2018/02/28/global-stocks-slip-yields-rise-on-fed-chiefs-testimony/

http://www.euronews.com/2018/02/28/global-funds-cut-stocks-to-three-month-low-after-turbulent-february-reuters-poll

https://www.bnn.ca/fed-s-powell-sends-global-stocks-reeling-to-five-day-low-1.1013431

https://www.wsj.com/articles/global-stock-markets-continue-advance-1519691701

http://www.livetradingnews.com/morning-briefing-global-stocks-178-75934.html#.Wpa29lWWaCg

https://www.investing.com/news/economy-news/top-5-things-to-know-in-the-market-on-wednesday-1316211