Aussie Gained, Stocks Are Calm
Aussie rose to be the firmest as Australian retail sales exceeded all projections. The single currency is trading as second firmest. Japanese Yen and Swiss Franc are rather weak. There was a 2-days meeting of the G7 finance ministers and central bank governors. Members were worried with a trade tension between the US and China. Specifically: “concerns were expressed that the tariffs imposed by the United States on its friends and allies, on the grounds of national security, undermine open trade and confidence in the global economy.” And, “Finance Ministers and Central Bank Governors requested that the United States Secretary of the Treasury communicate their unanimous concern and disappointment.”
Liu He (Chinese Vice Premier) and Wilbur Ross (US Secretary of Commerce) had another round trade negotiations. After the meeting, China published a statement, which concluded: “to implement the consensus reached in Washington, the two sides have had good communication in various areas such as agriculture and energy, and have made positive and concrete progress while relevant details are yet to be confirmed by both sides”. China also expressed its commitment to: “reform and opening-up as well as expanding domestic demand are China’s national strategies.” However, it warned: “all economic and trade outcomes of the talks will not take effect if the US side imposes any trade sanctions including raising tariffs.”
The European Commission sent a complaint to the World Trade Organization against China due to its violation of patent rights of European firms. EU also expressed its resentment towards US steel and aluminum tariffs. China promised to handle the complaint through WTO dispute settlement. Mohammad Javad Zarif (Iranian Foreign Minister) urged to save the JCPOA Iran nuclear deal, adding that the renegotiation, that the US has been wanting for so long, was impossible. He asked France, Germany, Britain, Russia and China to stand up to US “illegal withdrawal” and its “bullying methods to bring other governments in line”.
Australian retail sales grew 0.4% mom in April, comparing to 0.0% in the previous month. Wage growth, on the other hand, was slow at 0.8% qoq seasonally adjusted and 5.1% yoy. TD securities inflation gauge was flat at 0.0% mom in May, comparing to 0.5% mom in prior month. This week marks RBA rate announcement, Gross Domestic Product and trade balance, China’s trade balance, Canadian trade balance, Ivey PMI and employment data, British construction and services PMIs. As of today, Eurozone is going to release Sentix investor confidence, Purchasing Price Index, UK construction PMI and US factory orders.