Daily Markets Broadcast 2019-06-03

Daily Markets Broadcast

2019-06-03

Wall Street weakens on tariff war escalation

US indices are weaker in early trading this morning after a weekend escalation in the tariff spat. China laid the blame for the breakdown of talks on US President Trump, adding that it is willing to recommence negotiations, but will not be beaten into concessions. Trump potentially opened another trade war front with India by removing its developing nation status. Safe haven flows have accelerated, pushing 10-year US yields to a 2-year low.

 

US30USD Daily Chart

Source: OANDA fxTrade

  • The US30 index fell the most in 2-1/2 weeks on Friday, confirming the biggest monthly decline in five months
  • The index is testing the 38.2% Fibonacci retracement of the December to May rally at 24,668
  • The US ISM manufacturing PMI is expected to improve to 53.3 in May from 52.8 in June, the latest survey of economists shows.

 

DE30EUR Daily Chart

Source: OANDA fxTrade

  • The Germany30 fell the most since May 13 of Friday and has extended losses in early trading today, touching the lowest since April 1
  • The index is testing the 200-day moving average at 11,622, which has supported prices on a closing basis since April 1. The 38.2% Fibonacci retracement of the 2019 rally is at 11,621
  • The May final Markit PMI readings for both Germany and the Euro-zone are not expected to be revised from the initial readings of 44.3 and 47.7, respectively.

 

XAU/USD Daily Chart

Source: OANDA fxTrade

  • Gold prices jumped the most in four months on Friday as tariff/growth concerns increased. Additional gains this morning have taken the yellow metal to the highest since April 10 versus the US dollar
  • Prices moved above the 50% retracement of the February-April drop at 1,306.56 this morning. The 61.8% Fibonacci retracement is at 1,316.04
  • A deterioration in China’s manufacturing PMI in May, worsening trade relations and a damping of global growth expectations have improved safe haven flows. Gold has once again started to benefit along with US Treasuries, with 10-year US yields hitting a 2-year low.

 

 

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Andrew Robinson

Andrew Robinson

Senior Market Analyst at MarketPulse
A seasoned professional with more than 30 years’ experience in foreign exchange, interest rates and commodities, Andrew Robinson is a senior market analyst with OANDA, responsible for providing timely and relevant market commentary and live market analysis throughout the Asia-Pacific region. Having previously worked in Europe, since moving to Singapore he worked with several leading institutions including Bloomberg, Saxo Capital Markets and Informa Global Markets, proving FX strategies based on a combination of technical and fundamental analysis as well as market flow information. Andrew began his career as an FX dealer with NatWest and the Royal Bank of Scotland in the UK.
Andrew Robinson

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