1. Markets Tumble As Trump Targets Mexico With New Tariffs
The risk off mood has once again taken over the markets today with Chinese bourses slipping on weak data and the Trump administration announcing a fresh round of tariffs this time against its southern neighbour, Mexico. Donald Trump is introducing tariffs on Mexico by June 10th already of 5% which will rise month by month until the illegal immigration issue is solved. Given it is mainly US companies that produce in Mexico and import to the US, it is hurting its own economy the most, and it will likely impact prices causing them to rise and push inflation higher, which diminishes the outlook of a Fed rate cut.*
2. EU Markets Open Lower
Risk markets took a beating and are already trading at or below their lowest levels from two days ago, and it seems we are setting for a bearish close today, especially on the stock markets. European bourses opened sharply lower this morning as Trump’s fresh tariffs stirred fears of a global recession. The pan-European Stoxx 600 dropped 1% after the opening bell, hitting its lowest point since Feb 19th.**
3. Forex Preview: Safe Haven Currencies in the Green
The USD held on to most of its gains today while safe-haven currencies such as the JPY advanced. USD/JPY was last seen trading 0.72% lower as of 8:50 GMT this morning. A surprise drop in oil prices pushed the CAD lower with the CAD/JPY shedding 0.95% as of 8:50 GMT this morning. The EUR is holding at present levels, and possibly inflation figures today out of some EU member states could help the EUR remain above the 1.11 if they tick up a little bit, or for the very least not down. Elsewhere, the GBP doesn’t seem to have any buyers show up by any means and is at risk of making another leg down.***
4. Oil Prices Set for Steep Losses
Oil prices took a massive dive on bearish inventory data and sees further downside on Chinese numbers and US tariff developments. Oil prices are currently on track for their biggest monthly fall since November with U.S. crude output having returned to record levels.****
5. Gold Gains, BTC Touches $9K
Spot gold reacted strongly to the newly found safe haven demand coming out of the woodwork again and is currently trading above the $1,295, level, while it could extend back to its key $1,300 level and beyond. Elsewhere, BTC touched the 9k level yesterday and sold off strongly after that, even below the 8k again from which it recovered back to the $8,150 slightly below the 10-day EMA. If the price manages to close on or above the 10-day EMA, we would be looking at a normal correction within a persisting uptrend.*****
You can find and trade CFDs on all of the above mentioned assets on BDSwiss Forex/CFD platforms.
Sources:
*Investing May 31, 2019 2:48 AM ET
**CNBC May 31, 2019 3:53 AM ET
***FXStreet May 31, 2019 03:07 AM ET
****Bloomberg May 31, 2019 06:13 AM ET
*****Business Insider May 31, 2019 04:09 AM ET
