Risks of Trade War Dominate The Markets
Despite the reduction in geopolitical tensions, markets remain under pressure from the risks of a trade war. The tariffs, imposed by the United States, sparked a heated discussion at the G7 finance ministers meeting in Whistler over the weekend. The French Finance Minister even said that only a few days remained to avoid a trade war. The market’s focus will be directed at trade war targets, especially Canadian dollar, euro and Mexican peso.
A US delegation led by Commerce Secretary Wilbur Ross held talks with Chinese negotiators in Beijing on Saturday and Sunday. Those talks produced "positive and concrete" developments, according to a Chinese government statement carried by the official news agency, Xinhua. The statement gave few details on the talks, but it made clear that China would not deliver on commitments to buy more American goods if its exports are sanctioned.
The dollar rose against the Japanese yen, but fell versus major currencies, after the release of an optimistic report on employment in the US. Still, uncertainty about potential political risks has kept the short-term forecast of exchange rates. On Friday, the data showed an acceleration in the growth of jobs in the US and a rise in wages in May, which increased expectations for a fourth increase in Federal reserve rates this year and certainly rates will be raised in June.
Gold prices were mixed, with gold and silver trading lower while platinum and copper making gains. Gold prices were down $2.20, or 0.18%, to $1,297.10.