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America's Roundup: Euro falls as U.S.-China trade stand-off weighs, Wall Street tumbles, Gold dips, Oil prices fall on trade war-May 14th,2019

Market Roundup

• China defies Trump with new round of tariffs on U.S. goods

• Trump says no decision yet on levying tariffs on more Chinese goods

• Yuan weakest since December as China adds tariffs

• China says U.S. policies are causing existential damage to the WTO

• Fed officials see risks in weaker inflation expectations, trade row

• Fed's Kaplan says interest rates are about where they should be

Looking Ahead - Economic Data (GMT)

• 13 May 23:50 Japan Mar Current Account NSA JPY, 3,161.3 bln forecast, 2,676.8 bln previous

Looking Ahead - Events, Other Releases (GMT)

• 08:00 Nick Strange of BoE speaks at 21st Annual Operational Risk Europe Conference in London

• 08:40 Riksbank Governor Stefan Ingves talks about the economic situation and current monetary policy at conference in Stockholm

• 12:35 David Rule of BoE speaks at the Association for British Insurers' Prudential Regulation Seminar 2019 in London

• 15:00 New York FRB issues Q1 2019 Household Debt and Credit Report in New York

• 16:45 Kansas City Fed President Esther George speaks before the Economic Club of Minnesota

Currency Summaries

EUR/USD: The euro declined against the U.S. dollar on Monday, as investors adopted a wait-and-see approach as they tracked developments in U.S.-China trade war. Investors closely watched developments as hopes faded for an end to the U.S.-China trade war. The euro was down 0.01 percent at $1.1221. An index that tracks the dollar versus a basket of six major currencies was down 0.01 at 97.31 . Immediate resistance can be seen at 1.1248 (50 DMA), an upside break can trigger rise towards 1.1314 (100 DMA).On the downside, immediate support is seen at 1.1203 (9 DMA), a break below could take the pair towards 1.1171 (May 9th low).

GBP/USD: Britain's pound declined against the dollar on Monday, as growing concerns about escalation of U.S.-China trade tensions prompted investors to sell the British currency. China said on Monday it will adjust tariffs on a revised target list of $60 billion worth of U.S. imports, with additional rates of 20% to 25% in retaliation for a U.S. tariff hike on $200 billion worth of Chinese goods.The pound fell to a new 20-month low of $1.2490, down more than half a percent on the day, after earlier trading above $1.26. A stronger dollar also weighed on the British currency. Immediate resistance can be seen at 1.3041 (9 DMA), an upside break can trigger rise towards 1.3168 (Higher Bollinger Band).On the downside, immediate support is seen at 1.2937 (38.2% retracement level), a break below could take the pair towards 1.2900 (Psychological level).

USD/CAD: The Canadian dollar declined against its U.S. counterpart on Monday, as fears of renewed escalation in the Sino-U.S trade war and high volatility in global equities weighed on Canadian dollar. Oil prices fell as the negative turn in the U.S.-Chinese trade talks spooked investors, who had sent oil higher in early trade on concerns about reports of sabotage attacks on tankers in the Middle East that could disrupt supplies. The Canadian dollar was trading 0.4% lower at 1.3470 to the greenback . The currency, which on Friday touched a nine-day high at 1.3381, traded in a range of 1.3420 to 1.3483. Immediate resistance can be seen at 1.3500 (Psychological Level), an upside break can trigger rise towards 1.3548 (Higher Bollinger Bands).On the downside, immediate support is seen at 1.3381 (10th May low), a break below could take the pair towards 1.3308 (Higher Bollinger Band).

USD/JPY: The dollar declined against Japanese yen on Monday, as an escalation in the U.S.-China trade war between the United States and China dented risk appetite. Rising tensions between the two countries has also increased fears that China may sell its vast holdings of Treasuries as punishment or as a negotiation tactic against the United States. That hurt the greenback against safe haven currencies the Japanese yen and Swiss franc. The dollar was 0.02 percent lower versus the Japanese yen at 111.63. Strong resistance can be seen at 109.49 (38.2% retracement level), an upside break can trigger rise towards 110.23 (23.6 % retracement level).On the downside, immediate support is seen at 108.95 (9 DMA), a break below could take the pair towards 108.33 (61.8% retracement level). 

Equities Recap

European stocks continued their decline on Monday, on the heels of this year's biggest weekly loss, as an escalation in the U.S.-China trade war battered sentiment and prompted investors to shift into safer bets.

UK's benchmark FTSE 100 closed down by 0.5 percent, the pan-European FTSEurofirst 300 ended the day down by 1.08 percent, Germany's Dax ended down by 1.5 percent, France’s CAC finished the day down by 1.2 percent.

Wall Street sank on Monday after China defied Washington by announcing retaliatory tariffs, the latest salvo in the two countries' increasingly belligerent trade war, sending investors fleeing equities for less risky assets.

Dow Jones closed down by 2.38 percent, S&P 500 ended down2.42  percent, Nasdaq finished the day up by 3.42 percent.

Treasuries Recap 

U.S. Treasury yields fell to six-week lows on Monday as investors piled into low-risk assets after China announced plans to impose additional tariffs on U.S.-made goods in retaliation for a U.S. increase in duties on Chinese imports on Friday.

The yield on the benchmark 10-year Treasury was 5.2 basis points lower at 2.4033% after touching 2.389%, the lowest since March 28.

Ten-year yields fell below those on three-month Treasury bills. A sustained inversion of this part of the yield curve has preceded every U.S. recession in the past 50 years.

Commodities Recap

Oil futures fell on Monday with Wall Street, as the negative turn in the U.S.-Chinese trade talks spooked investors, who had sent oil higher in early trade on concerns about reports of sabotage attacks on tankers in the Middle East that could disrupt supplies.

Brent crude futures for July delivery fell 39 cents to settle at $70.23 a barrel. The global benchmark earlier hit a session high of $72.58 a barrel.

U.S. West Texas Intermediate (WTI) crude futures fell 62 cents to settle at $61.04 a barrel, after previously hitting $63.33 a barrel.

Gold prices climbed and were on track for their best day in nearly three months on Monday as investors sought a safe haven from market turmoil triggered by China announcing that it will retaliate over levies imposed by the Trump administration.

Spot gold climbed 1.1% to $1,299.30 per ounce as of 1:44 p.m. EDT (1744 GMT), after hitting $1,301.10, its highest since April 11. The metal was on track to mark its biggest one-day percentage rise since Feb. 19.U.S. gold futures settled 1.1% higher at $1,301.80 an ounce.
 

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