Global Market Watch - 19th June 2018
The market was relatively quiet yesterday morning as it waited for the House of Lords to return the Brexit bill to the House of Commons, with an amendment to it, for parliament to have the ability to return the government to the negotiating table if the deal agreed with the EU is not deemed good enough. In late New York trading this was confirmed and although GBPUSD had a quiet day, "dead cat bounce" springs to mind. With no economic data for the Pound today we wait for Wednesday’s Brexit vote.
Immigration is a big issue in Germany, and German Chancellor Merkel has been under pressure to find a solution to this problem before her Interior Minister Seehofer turns away migrants at Germany’s border. She has two weeks to find an EU-wide solution. If she doesn’t, and Seehofer puts his plan into action, she will have no alternative but to remove him from post, which will cause her coalition to collapse. President Trump has tweeted on this matter, being harshly critical of Angela Merkel and her immigration policy. ECB President Draghi speaks this morning.
Although the market was quite quiet, it wanted to buy Dollars as it had concerns over global trade. The US is not backing down against China and there was news last night that President Trump has asked his administration to produce a new list of tariffs for $200 billion worth of Chinese goods, these tariffs are to be at 10%. This latest step, if introduced by the President, risks more opposition at home and will probably if not definitely knock global trade.
The oil price rallied on Monday and helped the CAD strengthen, whilst the AUD posted its lowest close in a year after copper prices were soft as well. The latest RBA meeting minutes showed that the RBA was slightly more upbeat on the Australian economy’s prospects but still showed no signs of wanting to raise interest rates.