Trump Tweets against Canada and EU again, US-North Korea Summit Eyed

Trump Tweets against Canada and EU again, US-North Korea Summit Eyed


US indices started the week slightly lower as the G7 summit revealed that there is no deal on trade especially between the United States, European Union, and Canada. President Donald Trump issued a series of tweets attacking the Canadian Prime Minister Justin Trudeau on the 10th of June. Moreover, a couple of hours ago, he tweeted against the European Union and focused on the NATO funding. Trump affirmed, he will not accept anyone to take trade advantage on the United States, and he wants to ensure that the American-worker comes first. Despite trade tension, stocks remain supported by Trump’s optimism ahead of the US-North Korea nuclear summit that will take place tomorrow.


The dollar index, DXY, ended last week on losses and settled near its 30% retracement level of the move up from 89.25 to 95.03. The Greenback came under pressure despite the robust economic reports from the United States. Investors are taking into consideration the next steps of the European Central Bank and the Bank of England, as the Federal Reserve is close to neutral rate levels. It is a busy week for dollar traders as we wait for the Nuclear Summit and Consumer Price Index on Tuesday, the Federal Open Market Committee interest rate decision on Wednesday along with the press conference from Chairman Powell, and Retail sales on Thursday.


The Euro rose against the United States Dollar last week to put an end to a seven-week losing streak. The single currency was on the back foot since mid-April as the soft economic reports and the Italian political uncertainty weighed on the currency. The sluggish economic reports of the first quarter hinted that the European Central Bank could delay its tapering schedule. However, some officials announced last week that the ECB might share its tapering plan with the public in its meeting on June 14th which provided strong support to the Euro. Moreover, investor's fear of the political situation in Italy faded with the constitution of a new government that confirmed that Italy has no intentions of leaving the European Union.


Gold prices remained caught in a tight trading range for the third consecutive week. Major events will take place this week, and they might affect gold prices heavily. First, we start with the outcome of the Nuclear Summit between the United States and North Korea that is expected to increase the price volatility of the precious metal. Moreover, the FOMC interest rate decision on Wednesday is a key event for gold prices as gold was facing pressure lately due to the rise in the US Treasury yields.


Oil prices fell as the rise in production weighs on the oil market. The Baker Hughes, energy services firm, reported on Friday that the US energy companies added a new oil rig to a total of 862 which is the highest since early 2015. Moreover, a Russian news agency declared on Saturday that the Russian oil production rose to 11.1 million barrels per day to go above the 11 million target that was in the deal between Russia and OPEC back in 2017. Market participants are afraid that the rise in oil production from the United States, Russia, and OPEC lead to excess supply in the market and take prices down again.

Major Economic Events

GMT Country Event Expectation Previous
8:30 UK Manufacturing Production (MoM) (Apr) 0.3% -0.1%
8:30 UK Industrial Production (MoM) (Apr) 0.2% 0.1%


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