ICM, the leading London-based FX and CFDs provider, stated that the financial markets remain vulnerable to the outcome of the EU-US meeting today, the European Central Bank meeting tomorrow, and the second quarter GDP of the United States.
Major US indices rose earlier on Tuesday supported by the strong corporate earnings. However, the indices pared gains as we headed to the close. Dow Jones and SPX500 ended higher, whereas the tech-heavy Nasdaq Composite posted its biggest reversal since Feb 21st. As per ICM trading platform, Dow Jones traded at a six-week high of 25268 and settled at 25214. The SPX500 traded at a high of 2831and closed at 2821. On the other hand, the Nasdaq composite reversed from an all-time high of 7928 and settled lower at 7840. Nasdaq gained strength earlier from the upbeat earnings of Google’s parent company. President Donald Trump tweeted several times about trade yesterday, where he repeated that everyone is taking advantage over the US, and tariffs provide the best solution to deal with this matter. He added that he prefers to reach a free trade deal with the European Union today, but he believes that the EU can’t do it. The stock market will remain vulnerable to the second quarter corporate earnings and the outcome of the US-EU meeting.
ICM highlighted that the dollar index which measures the strength of the greenback against a basket of major currencies ended almost flat on Tuesday. DXY came under pressure on Thursday and Friday post comments from president Trump criticizing the strength of the US dollar and the rise in the interest rates. The economic data continue to show the gap in the economic growth between the US and its rivals which supports a divergence in the monetary policy between them and provide support to the dollar and US Treasury yields. However, a surge in the Eurozone inflation and a slowdown in the average hourly earnings in the United States could narrow the divergence in the interest rate path. As per ICM trading platform, USDJPY fell for the fifth consecutive day and settled at 111.19. EURUSD traded at a high of $1.1717, a low of $1.1655, and ended the day slightly lower at 1.1684.
Gold ounce ended the day on a neutral tone as the bullion traded at a high of $1229, a low of $1218, and settled near the open price at $1224. The gold ounce bounced-off a one-year low post the comments of president Trump about the dollar and interest rates. However, the rise in the US treasury yields erased part of the gains. On the other hand, the silver ounce traded at a one-week high of $15.60 and settled at $15.45.
Oil prices edged higher as the American Petroleum Institute reported that the US crude oil inventories fell by 3.16 million barrels last week. As per ICM trading platform, the West Texas Intermediate traded at a high of 69.02 whereas Brent traded at a high of 73.97. Oil prices were under pressure lately due to the rising risk of oversupply amid the expected slowdown in the global growth.