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A G7 meeting for the ages! US stocks post fightback; Heavy Central Bank news week coming up

Jun 11, 2018 | Daily Market Outlook

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G7 meetings, Korean summit key playmakers over the weekend. This weekend’s G7 meeting had more drama than the best soppies.

The Group of Seven summit held in Canada laid bare a deep rift on trade and tariffs between Trump and other leaders as the U.S. president tweeted he was backing out of the joint communique and lashed out against Trudeau. Trump has infuriated the European Union, Canada and Mexico by imposing tariffs on steel and aluminium imports.

President Trump fired off some incredible tweets aimed at Prime Minister Trudeau; “PM Justin Trudeau of Canada acted so meek and mild during our @G7 meetings only to give a news conference after I left saying that, “US Tariffs were kind of insulting” and he “will not be pushed around.” Very dishonest & weak. Our Tariffs are in response to his of 270% on dairy!” – “Based on Justin’s false statements at his news conference, and the fact that Canada is charging massive Tariffs to our U.S. farmers, workers and companies, I have instructed our U.S. Reps not to endorse the Communique as we look at Tariffs on automobiles flooding the U.S. Market!”

Continuing the excitement, President Trump is in Singapore for the historic meeting with North Korean Leader Kim Jong Un, the meeting is planned for this Tuesday. “Although the ‘Capella’ summit in Singapore is capturing public attention, the direct impact on markets is likely to be limited,” said Tai Hui, chief market strategist for Asia Pacific at J.P. Morgan Asset Management, adding that central bank meetings are likely to prove more critical this week.

With all of that out of the way, let’s take a look at the markets…. US markets recovered from lower leads on Friday to end the session higher. Closing gains were not high but the recoveries where strong. The Dow Jones S&P500 and Nasdaq all settling just under .5% higher.

European markets which lead US futures lower, finished in the red as trade worries continue hit confidence. The FTSE and DAX ending lower. Italy’s FTSE MIB was the worst performing index in the continent, down 1.89 percent.

Gold finished the week stronger driven higher by continuing trade disputes between the U.S. and its major trading allies. Oil edged lower on Russian and U.S. supply news. So far today Gold has continued to trade higher after gapping higher on Monday’s open. $1301 -1301.50 continues to show decent resistance to Gold buyers.

Asian shares have started the week mixed with loses the Shanghai index and gains on the Nikkei and HIS. The Kopsi is trading slightly higher with hopes of a positive outcome for tomorrows U.S. North Korean summit.

Looking at FX, we wouldn’t have been surprised to see a small flight to safety based on the weekend’s events. But risk is trading higher, the AUD EUR and GBP flat to making gains to the USD. The JPY is trading lower to the majors. The $/J 20 pips higher at this point.

Traders we have a busy week coming up inc, U.S. CPI data – Federal Reserve funds rate – statement and economic projections – ECB press conference and BOJ Policy Rate – Monetary Policy Statement – BOJ Press Conference. Depending on direction we could see some strong market moves.

Good trading from Eightcap.

Sources; CNBC All times are AEST

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