It’s been another turbulent week, thanks to Trump
losses as expectations continued to fade over the Bank of England raising UK interest rates. It is becoming clear that signs of cooling inflationary pressures could force the BoE to continue delaying monetary policy normalization this year. With the Pound more concerned with Brexit uncertainty and fading rate hike hopes, further downside is on the cards.
Focusing on commodities, Gold was bullish this week thanks to uncertainty over US - China trade talks. With a softening Dollar supporting the upside, the yellow metal was able to break above $1300.
With regards to Crude Oil, the prospect of OPEC and Russia easing supply curbs has resulted in downside losses. Price action suggests that bulls are struggling to find support from geopolitical risk factors to sustain the current rally.
The main talking point this week was when Donald Trump called off next month’s summit with North Korean leader Kim Jong-Un. However, North Korea’s conciliatory response to the abrupt cancellation eased investor jitters.
Focusing on the upcoming trading week, much attention will be directed towards the ongoing US - North Korea developments.
Signs of a de-escalation of tensions between both sides could support risk sentiment. Much attention will be direct towards the pending US GDP and NFP reports which should offer additional insight into the health of the US economy. It will also be interesting to see what major leaders discuss during the G7 meeting in British Columbia.