News

Dollar Index Inches Higher Lifted By US-China Tensions

USD

The dollar index, which measures the dollar against a basket of major currencies, inched higher during the Asian session to 99.43 as US-China tensions lifted demand for safety. Trump continued to offend China by tweeting that China is on a massive disinformation campaign since they are desperate to help Joe Biden win the elections so they can continue to rip-off the United States. Market participants are following up carefully on any statements from both ends to assess their effect on the market sentiment. On the other hand, they are looking forward to a series of economic indicators to be published later today, among them the weekly initial jobless claims, manufacturing/services PMI, and Powell's opening remarks at the "Fed Listens" event on COVID19. The EURUSD eased slightly to $1.0952, the GBPUSD declined to $1.2185, and the AUDUSD lost gains falling to $0.6549.

Equities

Major US stock index futures eased from their highs following Trump's tweet on China. Trump continues to blame China for the virus outbreak, and he added that China is aiming at supporting Biden in winning the elections race. The US-China tensions could be a ticking bomb that would lead to a full-blown war and weigh on the global economy. The Dow Jones Industrial Average futures descended to 24298, the S&P500 futures fell to 2942, and Nasdaq futures dipped to 9412.

Gold

Gold prices drifted lower as the dollar rebounded, awaiting fresh fundamental drivers. The price of a gold ounce dropped to $1735, the price of a silver ounce faltered at a three-month high of $17.63 and declined to $17.10, while palladium futures held gains trading at $2156.

Oil

Oil prices extended upside rally as US inventories declined. The US Energy Information Administration reported a decline of 4.983 million barrels last week. Market participants are optimistic about the reopening of the economy and its positive effect on oil demand levels. The West Texas Intermediate crude July delivery rose to $34.41, and Brent blend July delivery climbed to $36.71.

Major Economic Events

GMT Country Event Expectation Previous

12:30

US

 Initial Jobless Claims

2425

2981

12:30

US

 Philadelphia Fed Manufacturing Index (May)

-45

-56.6

13:45

US

 Manufacturing PMI (May) 

37.8

36.1

13:45

US

 Services PMI (May) 

30.0

26.7

14:00

US

 Existing Home Sales (Apr)

4.30

5.27

18:30

US

 Fed Chair Powell Speaks  

-

-

22:45

NZ

 Retail Sales (QoQ) (Q1)

-1.5%

0.7%

23:30

JP

 National Core CPI (YoY) (Apr)

-0.1%

0.4%

Disclaimer 

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