Trump Threatens Mexico with Tariffs Until Illegal Immigration Stops

Safe Havens Strengthen as Trump Threatens Mexico

The dollar continued gaining against most of the other G10 currencies. It underperformed only against JPY and CHF, while it was found virtually unchanged against SEK. The main losers were NOK, AUD, and NZD in that order.

Nikkei 225 — Technical Outlook

The Nikkei 225 index closed today’s trading session in the negative territory and also finished the week heavily in the red. The price made a lower low and continues to trade below a short-term tentative downside line taken from the high of May 3 rd. For now, unless that line gets broken, it seems that the direction for the index could be mainly south, hence why we will take a more bearish stance.

USD/JPY — Technical Outlook

Up until yesterday, the bulls still had hope that they would be able to push USD/JPY higher, maybe even beyond the short-term tentative downside resistance line drawn from the high of April 24 th. But after the US markets have opened, the pair started sliding and wiped out all the weekly gains overnight. This morning, we can see that the fall continued, which forced the rate to test a key support zone, at 109.00, marked by the lowest point of May, so far. For now, we will remain bearish and aim towards slightly lower areas.

As for the Rest of Today’s Events

During the European morning, we get German retail sales and preliminary inflation numbers for April and May respectively. Retail sales are expected to have rebounded 0.4% mom, after sliding 0.2% in March, something that will drive the yoy rate into positive territory, to +1.1% from -2.1%. With regards to inflation data, both the CPI and HICP rates are anticipated to have declined, to +1.6% yoy and +1.4% yoy from +2.0% and +2.1% respectively. Something like that could raise speculation that the headline CPI rate for the Eurozone as a whole, due out on June 4th, could move in a similar fashion. Coming on top of the bloc’s disappointing PMIs, slowing inflation could prompt investors to raise more bets with regards to additional policy measures by the ECB, beyond the new round of TLTROs, as well as for another delay in the timing of when interest rates could start rising.

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