Greenback Confidently Entering The Busy Week

Market Reviews

The greenback has reinforced to trade as the firmest. Kiwi and Yen rose as well. Aussie, Loonie and Euro are the softest. Asian stocks weakened with Nikkei lowering -1.26%, Shanghai SSE fell -1.13%. Singapore Strait Times dropped -0.65%. WTI crude oil remained over 73. The yellow metal keeps holding near 1250.

European Commission sent an 11-page statement to the US Commerce Department’s Bureau of Industry and Security. The document noted that tariffs on European auto imports will be “harmful first and foremost for the US economy.” And, the harm of the tariffs on US GDP could be “in the order of 13-14 billion USD.” Moreover, “current account balance of the US would be not affected positively.”

The US President shrugged off all the potential damage and stated that “The EU is possibly as bad as China, just smaller, okay. It’s terrible what they do to us.” Trump also said: “take a look at the car situation, they send their Mercedes in, we can’t send our cars in. And, look what they do to our farmers, they don’t want our farm products. In all fairness they have their farmers so they want to protect their farmers. But we don’t protect ours and they protect theirs.” He then proceeded: “they made, last year, $151bn in trade surplus. We had a deficit with the EU.” And, “on top of that, we spend a fortune on NATO to protect them.” Donald Trump repeated that he will impose sanctions on EU firms that are linked with Iran. James D. Melville Jr. (US ambassador to Estonia) declared he quits his position due to Donald Trump’s political position and statements.

International Monetary Fund issued a Currency Composition of Official Foreign Exchange Reserves data, which showed that in Q1 total global foreign exchange reserves increased 6.3% yoy, or 878 billion dollars to 11.59 trillion dollars. Reserves kept in USD rose 62.48% of total allocated reserves to 6.499 trillion dollars, marking a fresh 4-year minimum. Reserves kept in EUR increased 20.39% of total to 2.121 trillion dollars, which marked the 4-year maximum. Reserves kept in RMB grew 1.39% of total to 0.145 trillion dollars.

The BoJ’s quarterly Tankan survey for the second quarter concluded that the Larger Manufacturing Index fell from 24 to 21. Large Manufacturer outlook lifted from 20 to 21. Large Non-Manufacturing index increased from 23 to 24. Large Non-Manufacturing Outlook grew from 20 to 21. Large all industry capex was up 13.6%. Japanese PMI manufacturing made up 53.0 in June, revised down from 53.1. Chinese Caixin PMI manufacturing was down 0.1 at 51.0 in June. The official China PMI manufacturing declined -0.4 to 51.5. Official PMI non-manufacturing surged 0.1 to 55.0. According to New Zealand Treasury’s Monthly Economic Data report, real GDP growth in Q1 marked only 0.5%. Terms of trade reduced -6.7%.

Today, Swiss will feature SVME PMI and retail sales, Eurozone will publish PMI manufacturing final, PPI and jobless rate, Britain will present PMI manufacturing, the US will announce ISM manufacturing and construction spending.