1. Forex Preview: Oman Oil Tanker Attacks Push the USD Higher
The greenback remained largely supported on the rising Middle East tensions and the outlook of a possible US war with Iran. Yesterday’s attack on 2 oil tankers was officially blamed on Iran by Pompeo out of the US, which has fuelled global tensions even more. Elsewhere, the EUR/USD pushed lower as rumours of an Italexit and the making of a new Italian currency persisted. The GBP/USD is also in the red but seems to find its bottom close to but still below the important $1.27 mark, ahead of the BoE governor Carney’s speech later this afternoon.*
2. Increasing Global Tensions Take Their Toll on Stock Markets
European stocks started the day lower as the world focused on increasing Middle-East tensions with some claiming that the drums of war are loud and clear. U.K. shares, noted steep losses this morning as Brexiteer Boris Johnson landed a convincing victory in the first round of voting for the Conservative party leadership. Meanwhile, US National Economic Council Director Kudlow, stated that China broke the WTO trade law and that the POTUS will act on it, which deepens US/China tensions even further. U.S. stock futures also pointed to a bearish US open today, with investors monitoring increasing global tensions.**
3. Retail Sales Data in Focus: How will it Affect the USD?
All eyes will be on this afternoon’s Retail Sales out of the US; weaker than expected readings could be bullish for US stock markets as they will support expectations of the Fed needing to cut rates. Core retail sales in May is expected to have jumped 0.5%, according to market consensus.***
4. Gold Adds +1%
Elsewhere, gold prices advanced this morning, moving closer to their 14-month high hit last week, as trade and political turmoils, along with U.S. rate cut expectations propped up demand. XAU/USD added 1% to last trade at $1355.40 as of 8:11 GMT this morning. The rise of the noble metal also indicated that the broader risk-OFF tone is not to be overlooked in the midst of a still overbought stock market.****
5. Oil Prices Dip After Massive Rally
Oil prices corrected lower this morning after noting sharp gains following attacks on two oil tankers in the Gulf of Oman that stoked concerns of reduced crude flows through one of the world’s key shipping routes. Brent crude futures were down 26 cents, or 0.4%, at $61.06 a barrel by 8:15 GMT this morning, while U.S. West Texas Intermediate crude futures were down 36 cents at $51.91 a barrel.*****
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*CNBC Jun 14, 2019 2:48 AM ET
**Reuters Jun 14, 2019 3:53 AM ET
***FXStreet Jun 14, 2019 03:07 AM ET
****Bloomberg Jun 14, 2019 06:13 AM ET
*** Investing Jun 14, 2019 08:54 AM ET