US President Trump addressing a rally says China wants to talk

HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.

ADVISORY WARNING: FOREXLIVE™ provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect’s individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of future results and FOREXLIVE™ specifically advises clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FOREXLIVE™ expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.

Let’s block ads! (Why?)

Forexlive RSS Breaking news feed

US dollar rally halted after Richmond Fed

US dollar still near the highs of the day

The march higher in the US dollar today stalled after a surprise drop in the Richmond Fed. The index sank to -12 from +2. It’s the worst reading since 2013 and was coupled with significant declines in nearly all the underlying indexes.

What’s so puzzling about it is that other regional manufacturing numbers have rebounded. The Philly Fed posted its largest one-month rise on record this month.

The dollar had been rallying ahead of the data but it’s stalled out now. However EUR/USD remains near the session low of 1.1151 and the dollar is less than a dozen pips away from the peak right across the board.

The move in USD/JPY is a bit more pronounced but it’s all within a narrow range.

US dollar still near the highs of the day

ForexLive

Let’s block ads! (Why?)

Forexlive RSS Breaking news feed

Italian Bond Rally Hits a Hurdle as Election Uncertainty Grows

(Bloomberg) — This week’s rally in Italian bonds has come to a halt on uncertainty over whether the country is heading for an election.

Benchmark 10-year yields jumped Friday, after falling to a three-year low Thursday, on a report that Deputy Prime Minister Matteo Salvini hadn’t decided whether to hold a snap election. The securities are still on their longest-winning weekly streak in five years as investors bet on monetary policy easing by the European Central Bank.

Salvini is seen as Italy’s most powerful politician following his League party’s strong performance in May’s European vote. President Sergio Mattarella wants him to make his intentions on an election clear in the next 48 hours, so that any new government can be in place by October to deal with the 2020 budget and deficit talks with the European Commission, according to an official.

“The uncertainty of a general election tends to make investors cautious, hence this knee-jerk BTP selling and spread widening,” said Peter Chatwell, head of European rates strategy at Mizuho International Plc.

The yield on Italy’s 10-year bonds rose five basis points to 1.60%, widening the premium over its German peers by six basis points to 193 basis points. Yields have fallen for seven weeks, the longest streak since 2014.

Italian and Greek bonds have been leading the rally across Europe in the past month after ECB President Mario Draghi flagged possible further stimulus. The ECB meets to discuss policy next week. That means there are now plenty of “willing profit takers” after the run of gains, said Charles Diebel, head of fixed income at Mediolanum S.p.A.

“Many investors recently increased their exposure to peripheral European government bonds on the back of the prospect of ECB easing, expected to be delivered by September,“ said Martin van Vliet, a rates strategist at Robeco. “This bout of uncertainty affects conviction.”

(Adds comment by Martin Van Vliet in the seventh paragraph.)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Let’s block ads! (Why?)

Forex News

Video: What to watch for in the non-farm payrolls report and why CAD could rally

HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.

ADVISORY WARNING: FOREXLIVE™ provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect’s individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of future results and FOREXLIVE™ specifically advises clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FOREXLIVE™ expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.

Let’s block ads! (Why?)

Forexlive RSS Breaking education feed

Australian dollar defies broader risk rally as RBA cut looms

TOKYO (Reuters) – The Australian dollar nursed wounds on Tuesday, a day after it posted its biggest one-day fall in more than two months ahead of an expected central bank easing while improved risk appetite supported the greenback.

The dollar index against a basket of six major currencies remained near its highest in a week as sentiment picked up following an agreement between the United States and China to resume talks to resolve their trade war.

That left the euro mired at its lowest level in more than a week as disappointing economic data triggered a tumble in bond yields and boosted expectations for a central bank rate cut in the common currency bloc.

In the Asian session, investor focus has shifted to the Reserve Bank of Australia (RBA), which is tipped to lower interest rates by 25 basis points to a record low of 1.00% at a meeting later on Tuesday.

RBA Governor Philip Lowe will also speak to business leaders in Darwin after the meeting, which could provide clues on how much further interest rates could fall. A Reuters survey showed economists see a chance of another cut to 0.75% by year end.

“Lowe is speaking in Darwin, and that is really where the market will be looking for clues… but our view is we will get at least one more follow-up cut,” said Ray Attrill, head of FX strategy at National Australia Bank in Sydney.

“The other story is the revival in the U.S. dollar’s fortunes, which has surprised me a little bit, but you have the juxtaposition of Treasury yields backing up and new record lows from European yields.”

The Australian dollar was little changed at $ 0.6965 after slumping 0.9% on Monday, its biggest decline since April 24. The could dip below $ 0.6950 after the RBA’s decision around 0430 GMT but would likely stabilize as traders await Lowe’s comments expected 0930 GMT, Attrill said.

The () was up 0.5% at 96.809 on Tuesday, having posted its biggest gain since March 7 on Monday, bolstered by optimism over U.S.-China trade talks.

The focus now shifts to U.S. non-farm payrolls data due on Friday, which economists expect to have risen by 160,000 in June, compared with a 75,000 increase in May.

However, analysts expect the dollar will struggle to make substantial additional gains given expectations the Federal Reserve will cut rates due to low inflation and worries about the U.S.-China trade war.

The euro () limped into Asian trading on Tuesday, changing hands at $ 1.1286. The common currency fell 0.7% on Monday, its biggest-one day decline since March.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Let’s block ads! (Why?)

Forex News

MLB roundup: Padres rally to cap record-setting series

© Reuters. MLB: San Diego Padres at Colorado Rockies © Reuters. MLB: San Diego Padres at Colorado Rockies

Greg Garcia had four hits, including a two-run triple as part of a four-run ninth inning, and the San Diego Padres rallied to beat the Colorado Rockies 14-13 in Denver on Sunday.

The two teams combined for 92 runs in their four-game series to set a modern-era record. Rockies outfielder Charlie Blackmon homered and had three hits in the finale to set a record for most hits in a four-game series with 15.

Hunter Renfroe hit two home runs for San Diego on Sunday, and Fernando Tatis Jr. had three hits and was a home run short of a cycle. Gerardo Reyes (3-0) struck out the side in the eighth inning to get the win, and Kirby Yates got the last three outs for his 24th save.

The Padres rallied in the ninth for the second time in the series after coming back from six down Friday. Rockies closer Wade Davis (1-2) walked two, Wil Myers cut it to 13-11 with a single and Garcia tied it with his triple.

Dodgers 3, Cubs 2

Cody Bellinger hit a home run, and closer Kenley Jansen found a bit of redemption as Los Angeles held off visiting Chicago.

Jansen earned his 21st save, although just barely, one day after he gave up a two-run home run to Anthony Rizzo in the ninth inning that gave the Cubs a 2-1 victory. Jansen put the first two runners aboard in the ninth inning but escaped unharmed.

The Dodgers took a 3-2 lead in the eighth inning when Russell Martin fought off a breaking ball from Steve Cishek (1-4) to dunk a single into left field and score Chris Taylor from second base. Ross Stripling (3-2) pitched a scoreless eighth inning for the victory.

Red Sox 8, Orioles 6 (10 innings)

Rafael Devers led off the top of the 10th with a home run while Mookie Betts and Christian Vazquez each added two-run singles in the inning as visiting Boston rallied past Baltimore for its firth straight win.

Boston trailed 3-2 heading into the ninth but Marco Hernandez tied the game with a one-out homer off Mychal Givens (0-4), who also gave up Devers’ blast in the 10th. Brandon Workman (5-1) earned the victory for the Red Sox.

Stevie Wilkerson helped Baltimore try to rally in the 10th with a two-run homer, and Trey Mancini added a solo shot, but it wasn’t enough.

Yankees 10, White Sox 3

Cameron Maybin homered as New York went deep for the 19th straight game and salvaged a four-game series split with host Chicago.

Austin Romine drove in a season-high four runs, and Brett Gardner also had four RBIs for the Yankees, who won for the fifth time in their last 13 games.

New York starter James Paxton (4-3) allowed two runs on eight hits in six innings, striking out seven and walking one. Odrisamer Despaigne (0-2) allowed seven runs on nine hits in 4 1/3 innings in the loss.

Rays 6, Angels 5

Brandon Lowe and Tommy Pham hit solo home runs to help lift Tampa Bay past Los Angeles to earn a split of the four-game series at St. Petersburg, Fla.

Pham hit his 10th home run of the season in the fifth inning to break a 3-3 tie. The Rays tacked on two more runs in the eighth on an RBI single by Yandy Diaz and a wild pitch, important runs after Mike Trout hit a two-run homer in the ninth to cut the deficit to 6-5.

Colin Poche (1-1) got the win in relief for Tampa Bay. Angels rookie right-hander Griffin Canning (2-3) went six innings, allowing four runs on six hits and striking out seven.

Indians 8, Tigers 0

Trevor Bauer notched his first win since April 30 with the first complete-game shutout of his career, rookie Oscar Mercado drove in a career-high four runs and Cleveland cruised past host Detroit.

Bauer (5-6) allowed just four hits and walked none while striking out eight as the Indians swept the three-game series. His last complete-game victory was June 22, 2016.

Tigers starter Spencer Turnbull (3-6) allowed six runs on 10 hits in five innings. Detroit has lost four in a row and dropped 11 of its last 14 games.

Royals 8, Twins 6

Martin Maldonado went 3-for-4 with two RBIs and two runs scored, and Jorge Bonifacio and Billy Hamilton each drove in two runs as Kansas City held off Minnesota at Minneapolis.

Nicky Lopez and Cheslor Cuthbert each scored two runs for the Royals, who defeated Minnesota for the first time in five games this season. Jorge Lopez (1-6), in relief of Jakob Junis, allowed one run on four hits in 2 1/3 innings to pick up the win, and Ian Kennedy picked up his seventh save.

Nelson Cruz homered and drove in three runs, Miguel Sano also homered and Max Kepler went 4-for-6 for the Twins, who left 15 batters on base. Martin Perez (7-3) allowed five runs (four earned) on six hits, all singles, and a walk while striking out seven to pick up the loss.

Braves 15, Phillies 1

Josh Donaldson homered for the second straight game, one of three long balls hit by Atlanta in a blowout of visiting Philadelphia.

The victory gave the Braves their ninth win in their last 10 games. The Phillies have lost five of their last seven.

Donaldson was 3-for-4 — his second straight three-hit game — and Ronald Acuna Jr. added four hits for Atlanta. Braves starter Mike Foltynewicz (2-5) pitched six innings and allowed one run on four hits, walking five and striking out six, while Phillies righty Vince Velasquez (2-4) worked 2 1/3 innings and allowed four runs on four hits for the loss.

Blue Jays 12, Astros 0

Trent Thornton worked 6 2/3 shutout innings as Toronto salvaged the finale of its three-game series at Houston.

Thornton (2-5), a fifth-round selection by Houston in the 2015 draft, allowed six hits and three walks with seven strikeouts for his third scoreless start this season.

Rookie first baseman Rowdy Tellez slugged the first of five Toronto home runs with two outs in the first inning, a solo shot off Astros right-hander Brad Peacock (6-4). Nine of the Blue Jays’ 14 hits went for extra bases.

Cardinals 4, Mets 3

Paul DeJong continued to thrive against New York when he hit a tiebreaking solo homer with one out in the eighth inning to lead visiting St. Louis to victory.

DeJong snapped a 3-3 tie when he lifted a 3-1 breaking ball from Chris Flexen (0-3) into the lower rows of the left-field seats. It was the shortstop’s third homer of the four-game series, in which the Cardinals won three games.

Andrew Miller (3-2) worked around a single in the seventh, and Carlos Martinez pitched two scoreless innings and recorded his second save, ending the game by getting pinch hitter Wilson Ramos on a double play started by DeJong.

Brewers 5, Giants 3

Eric Thames and Jesus Aguilar hit home runs, and the bullpen tossed five scoreless innings as Milwaukee ended host San Francisco’s win streak at four.

Christian Yelich went 2-for-5 with two doubles in the Brewers’ 12-hit attack, and Yasmani Grandal, Travis Shaw and Thames each added two hits. Matt Albers (3-2) got the win, and Josh Hader retired all six batters he faced for his 17th save in 18 chances.

San Francisco starter Jeff Samardzija (3-6) grounded an RBI single but allowed four runs and nine hits in five innings.

Mariners 6, Athletics 3

Kyle Seager’s two-run double with the bases loaded in the eighth inning sparked a four-run rally as Seattle defeated host Oakland.

Mallex Smith homered for the Mariners, who took two of three games in the series. Mike Leake (6-6) pitched seven strong innings, allowing three runs (two earned) on seven hits with no walks and seven strikeouts, and Roenis Elias worked the ninth for his seventh save of the season.

Khris Davis and Ramon Laureano homered for the A’s. Oakland right-hander Lou Trivino (2-5) took the loss, despite just one of the four runs he surrendered in the eighth being earned after a fielding error by right fielder Mark Canha.

Nationals 15, Diamondbacks 5

Matt Adams had two homers and a career-high seven RBIs, including a grand slam in the eighth inning, and Anibal Sanchez had another strong outing as host Washington dumped Arizona for a split of a four-game series.

Adam Eaton (NYSE:), Anthony Rendon and Howie Kendrick added three hits for Washington, which has won 14 of its last 21 contests. Sanchez (3-6), who gave up two runs in six innings, captured his 100th MLB win and third straight decision over four starts.

Archie Bradley (2-4) gave up four runs in 1 1/3 innings in his first start for the Diamondbacks since 2016.

Reds 11, Rangers 3

Jesse Winker homered to highlight his career-best four-hit, five-RBI performance as host Cincinnati drubbed Texas.

Yasiel Puig launched a two-run homer for the second straight game, and Reds starter Sonny Gray (3-5) allowed three runs on five hits and struck out eight over five innings.

Texas’ Hunter Pence belted a two-run homer before exiting in the fifth inning with tightness in his right groin, the team announced. Rangers starter Ariel Jurado (4-3) was roughed up for seven runs on nine hits in three innings.

Pirates 5, Marlins 4

Josh Bell hit a go-ahead RBI double in the seventh inning, helping visiting Pittsburgh rally past Miami.

Pirates reliever Richard Rodriguez (1-3) earned the win, pitching one scoreless inning. In all, the Pittsburgh bullpen pitched four innings of scoreless ball, getting five outs from Kyle Crick and four from Felipe Vazquez, who earned his 16th save.

Reliever Nick Anderson (2-3), who gave up two runs in the seventh, took the loss. The Marlins offense was led by rookie Harold Ramirez, who hit a three-run homer.

–Field Level Media

Let’s block ads! (Why?)

Sports and General News

Forex – U.S. Dollar Falls on Trade Worries; Euro Rally Stalls

© Reuters.  © Reuters.

Investing.com – The U.S. dollar was lower on Thursday, as traders remained wary after U.S. President Donald Trump said he would make a decision on Chinese tariffs after the G20 summit.

The , which measures the greenback’s strength against a basket of six major currencies, fell 0.3% to 96.968 by 10:38 AM ET (14:38 GMT).

Trade tensions escalated after Trump said he could add up to $ 300 billion of more tariffs on China and that he would make a decision after the G20 summit at the end of June.

Traders are also monitoring the Federal Reserve for more hints on if it will cut rates after Fed Chairman Jerome Powell said the central bank would “act as appropriate to sustain” the economy.

The dollar was lower against the safe-haven Japanese yen, with falling 0.2% to 108.19.

Meanwhile, the euro was higher after the European Central Bank kept rates steady, but lost some gains after ECB President Mario Draghi volunteered that some of his colleagues had , arguably the most powerful tool in the central bank armory at present.

rose 0.5% to 1.1270 after hitting a session high of 1.1287.

Sterling inched up, with gaining 0.2% to 1.2713, while slipped 0.2% to 1.3379.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Let’s block ads! (Why?)

Forex News

Treasuries Rally Rolls on as Bets Build on 2019 Fed Rate Cuts

© Reuters.  Treasuries Rally Rolls on as Bets Build on 2019 Fed Rate Cuts © Reuters. Treasuries Rally Rolls on as Bets Build on 2019 Fed Rate Cuts

(Bloomberg) — Investors are plowing into Treasuries, favoring shorter maturities in particular, on growing conviction that the Federal Reserve will cut borrowing costs this year to contain the fallout from trade tensions.

Two-year yields dropped to their lowest level since 2017 amid a five-day slide that’s the longest since January. China’s move to extend retaliatory tariffs on American imports helped ignite the rally, and a report showing weakness in U.S. manufacturing added to the grim mood. St. Louis Fed President James Bullard accelerated the haven demand with comments that a rate cut may be needed “soon” amid the trade war.

Trade friction and a darkening growth outlook have traders betting that the Fed will slash its target rate by more than a half percentage point by year-end, and further in the first quarter of 2020. Short-dated Treasuries, which are more sensitive to Fed expectations, will likely outperform as investors price in policy easing, according to Bank of America Corp (NYSE:).’s Mark Cabana.

“The market is increasingly convinced the Fed will cut,” the bank’s head of U.S. interest-rate strategy said via email. “The only question is how soon, and by how much.”

Yields on two-year Treasuries slumped as much as eight basis points Monday to 1.84%. Meanwhile, benchmark 10-year yields dropped to 2.07%, the lowest since September 2017. Yields in the euro area also broke new ground, with the rate on briefly falling to a record low of about minus 0.22%.

The outperformance of two-year Treasuries relative to 10-year notes increased the yield premium of the longer note over the shorter to as much as 25 basis points, the most in about a month, in a move known as “bull-steepening.” The yield curve is closely monitored for its reliability in predicting recessions.

“Bull-steepenings generally take place when the market starts to see the risk of recession prompting the Fed to act,” said Seema Shah, a global investment strategist for Principal Global Investors. It “reflects the rush of negative sentiment over the weekend which, if it isn’t arrested by positive developments on the trade front, has the potential to take the market much lower.”

Banks such as JPMorgan Chase & Co (NYSE:). and Barclays (LON:) have updated their calls to project cuts in 2019. JPMorgan has also downgraded its Treasury yield forecasts, citing a “deteriorating growth outlook” alongside escalating trade tensions.

“The latest developments this week are likely to have lasting damaging effects on business confidence,” JPMorgan analysts led by Matthew Jozoff and Alex Roever wrote in a note. “Growth concerns are unlikely to dissipate over the near term, and could in fact build further.”

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Let’s block ads! (Why?)

Forex News

Summer of Fear May Push Treasury Yield to 1.5%, Ignite Yen Rally

© Bloomberg. A U.S. Customs and Border Protection (CBP) officer walks next to a truck entering from Mexico at the Otay Mesa Cargo Port of Entry in San Diego, California, U.S., on May 23, 2017. The skirmish among House Ways and Means Committee Republicans over a border tax provision resurfaced during a May 24 hearing where Treasury Secretary Steven Mnuchin was testifying on the president's proposed fiscal year 2018 budget. Photographer: David Maung/Bloomberg © Bloomberg. A U.S. Customs and Border Protection (CBP) officer walks next to a truck entering from Mexico at the Otay Mesa Cargo Port of Entry in San Diego, California, U.S., on May 23, 2017. The skirmish among House Ways and Means Committee Republicans over a border tax provision resurfaced during a May 24 hearing where Treasury Secretary Steven Mnuchin was testifying on the president’s proposed fiscal year 2018 budget. Photographer: David Maung/Bloomberg

(Bloomberg) — Be prepared for a summer of uncertainty, where calls for Treasuries and the yen get ever more expansive as U.S. President Donald Trump turns tariffs into his favorite foreign policy tool.

Trump’s unexpected decision to slap a levy on Mexican imports is casting renewed doubt over the prospect of a U.S.-China trade deal. While strategists have this week laid out a variety of reasons for Treasury 10-year yields to fall to 2% and the yen to strengthen, some money managers are now calling for an even stronger rally in haven assets.

“If there were some who still thought there might be a near-term resolution with China, that’s now gone out of the window,” said Prashant Newnaha, senior rates strategist at TD Securities Inc. in Singapore. “This whole trade war outlook is going to be a lot more prolonged. From an outright perspective, you’d want to be buying Treasuries.”

Trump’s unexpected tweet late Thursday about the imposition of tariffs on Mexico ratcheted up the concern surrounding global trade frictions that has already dragged in nations as diverse as South Korea, Japan and Canada, as well as the European Union. The U.S. president has also threatened to levy taxes on auto imports, and only this week said he doesn’t see a deal with China happening soon.

Market turmoil and concern over slowing global growth will lead to even bigger bets on Treasuries, pushing the U.S. 10-year yield down to 1.5%, according to Akira Takei, a global fixed-income fund manager at Asset Management One in Tokyo.

Takei, who once called himself “the most bullish Treasury investor in Japan,” said he is buying U.S. government bonds due in five to 10 years as he bets the market will price in a higher likelihood that the Federal Reserve will cut interest rates. Yields would have fallen even without the U.S.-China trade war because the U.S. hikes through December have tightened financial conditions and hurt the economy, he said.

Mexico Tariffs Make China-U.S. Deal Less Likely, Analysts Say

The fell four basis points Friday to 2.17% after touching the lowest since September 2017. The rose 0.6% to 108.96 per dollar, extending its biggest monthly gain this year. Mexico’s slid as much as 2.5%.

The yen may strengthen to 105 per dollar by year-end, a gain of about 4% from current levels, according to Damien Loh, chief investment officer at hedge fund Ensemble Capital in Singapore. Treasury yields are likely drop below 2% by year-end, he said.

“The Mexico news came as a surprise to everyone,” Loh said. “It’s really a single person — Trump — that’s driving everything at the moment.”

Trump said he would slap tariffs of up to 25% on Mexican goods until the country stops the flow into the U.S. of illegal immigrants. That surprised traders given that Mexico has agreed to a new North American trade pact. Tension also ratcheted higher after it was reported that China is said to have a plan ready to restrict exports of rare earths to the U.S.

Three Cuts

Swap markets are pricing in three Fed rate cuts by the end of 2020. Bonds have rallied around the world this week, with yields on 10-year securities in Australia and New Zealand dropping to records, while the equivalent German bunds are within a few basis points of the same.

The spread between three-month and 10-year Treasury yields — taken as an indicator of a future recession — became the most inverted since 2007 this week, suggesting more investors are expecting an economic contraction in the world’s largest economy. Treasury 10-year yields at 1.50% would be the lowest since 2016.

“It’s not a war on trade anymore, the tariffs are now being used as a weapon for a lot of different issues he has with with various countries,” said Janu Chan, senior economist at St. George Bank in Sydney. “It affects companies, business confidence. It’s very damaging to the global economy the way he’s going about it”

Let’s block ads! (Why?)

Forex News

Asia stocks sag, bonds rally as trade war fears persist

© Reuters. A man looks on in front of an electronic board showing stock information at a brokerage house in Nanjing © Reuters. A man looks on in front of an electronic board showing stock information at a brokerage house in Nanjing

By Shinichi Saoshiro

TOKYO (Reuters) – Asian stocks tracked Wall Street losses on Thursday as rhetoric from Beijing and Washington over trade matters kept alive investor concerns about the tariff war’s impact on global economic growth.

The risk aversion propped up global safe-haven assets such as government bonds, with yields on German benchmark debt approaching record lows.

The dispute between the world’s two largest economies showed few signs of abating, with Chinese newspapers reporting that Beijing could use rare earths to strike back at Washington after U.S. President Donald Trump remarked he was “not yet ready” to make a deal with China over trade.

Japan’s was down 0.5% and Australian stocks shed 0.66%.

MSCI’s broadest index of Asia-Pacific shares outside Japan stood little changed after slipping to a four-month low the previous day.

“The equity markets are in the midst of pricing in a long-term trade war, with participants shaping their portfolios in anticipation of a protracted conflict,” said Soichiro Monji, senior strategist at Sumitomo Mitsui DS Asset Management.

“The upcoming G20 summit could provide the markets with relief, as the United States and China could use the event to begin negotiating again over trade.”

The G20 meeting is set for June 28-29 in Japan.

Amid the flight-to-safety Germany’s 10-year bond yield fell to a three-year trough of minus 0.179% overnight. A drop below minus 0.200% set in 2016 would take the yield to a record low.

Spanish and Portuguese 10-year yields fell to record lows as deeply negative German Bund yields have encouraged investors to look elsewhere for returns.

Elsewhere, the stood at 2.267% after falling to a 20-month low of 2.210% on Wednesday.

Lower Treasury yields not withstanding, the against a basket of six major currencies was steady at 98.139 following two straight days of gains, with the greenback serving as a safe haven.

The euro was a shade higher at $ 1.1141, pulling back slightly following three successive days of losses.

The dollar was little changed at 109.615 yen after bouncing back from a two-week low of 109.150 brushed on Wednesday.

Oil prices rose modestly following volatile trading on Wednesday, when they fell to near three-month lows at one point as trade war fears also gripped the commodity markets.

futures were up 0.43% at $ 59.06 per barrel after brushing $ 56.88 the previous day, their lowest since March 12.

Trade worries have weighed on oil but supply constraints linked to the Organization of the Petroleum Exporting Countries’ output cuts and political tensions in the Middle East have offered some support.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Let’s block ads! (Why?)

Stock Market News