ICM Capital, the leading FX and CFDs provider, reported that the global financial markets are still vulnerable to the developments of the trade tensions between the world’s two biggest economies. However, major US indices erased some of their losses post comments from the White House trade advisor, Peter Navarro. Despite his offensive comments towards China, Navaro is confident that the good relationship between President Donald Trump and President Xi will help in resolving the trade issues. On the other hand, the European Central Bank forum continues today, and major central bankers will deliver remarks on “Microeconomics of Price and Wage-Setting.”
The Dow Jones Industrial Average found support at a two-week low of 24569 and recovered to 24850 during the Asian session. General Electric, a major member of the Dow Jones Industrial Average since early 1900, will be replaced by Walgreens, a national retail drugstore chain on June 26th.
ICM highlighted the strength of the US dollar due to risk-off trading. The dollar index that measures the greenback strength against a basket of six major currencies rose to an 11-month high of 95.30. Traders are waiting for the remarks of the ECB President Mario Draghi, Fed Chairman Jerome Powell, BoJ Governor Haruhiko Kuroda, and the RBA governor Philip Lowe at the ECB forum today. On the other hand, the Bank of England meeting is due tomorrow. After the Hawkish monetary policy stance of the Federal Reserve and the dovish monetary policy stance of the European Central Bank, how will the Bank of England act? The British Pound was on the back foot since mid-April due to the sluggish economic reports from the United Kingdom. Investors anticipated that the Central Bank will be forced to delay any monetary policy tightening measures.
Gold prices tumbled on Tuesday to a fresh 2018 low of $1270 despite the market anxiety that is happening because of the trade dispute. Moreover, the price of the silver ounce fell to a low of $16.23.
Oil prices rose during the Asian session as the American Petroleum Institute (API) showed that the US crude oil stock fell last week by 3.016 million barrels. However, the major event for the oil market is taking place on June 22nd. Oil producers will meet in Vienna to discuss the future oil production plan. The meeting will be a tough one, as the producers have different views regarding the output plan.