 Expectations setting were rather well set for the highly anticipated Trump-Xi meeting at G20. Both sides agreed to stop raising tariffs further. But it's unsure whether they've closed the huge gap that led to collapse in trade negotiations. If the causes remain, the results would be the same no matter how long the talks will continue. But anyway the results should keep investors happy for now and we'd likely see a lift in sentiments as the week starts. In the currency markets, commodity currencies already jumped the gun last week, lead by New Zealand, then Australian and Canadian Dollar. However, Aussie will be facing risks of RBA rate cut as well as Chinese data this week. Economic data from Canada affirmed BoC's neutral stance. But WTI crude oil appears to have topped at 59.84 after failing 60 handle. Pull back in oil price could be a drag on the Loonie this week. On the other hand, Yen was the weakest one last week, followed by Sterling and then Swiss Franc. Dollar was mixed as it pared some losses after Fed officials talked down the chance of aggressive 50bps cut. While markets are pricing in 100% chance of a Fed cut in July, we'd maintain that the meeting is still live. At least, the upcoming data of ISM indices and non-farm payroll would need to show some more deterioration in the economy to seal the dovish case. Otherwise, we might see Dollar forming a bas for sustainable rebound. | 
No comments:
Post a Comment