U.S. Futures Steady as Rate-Cut Bets Rise on Soft Labor Data 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
Dollar Weakens Ahead of Expected Federal Reserve Rate Cut 
Oil Prices Hold Steady as Ukraine Tensions and Fed Cut Expectations Support Market 
Asian Currencies Steady as Markets Await Fed Rate Decision; Indian Rupee Hits New Record Low 
Asian Markets Mixed as Fed Rate Cut Bets Grow and Japan’s Nikkei Leads Gains 
China’s Services Sector Posts Slowest Growth in Five Months as Demand Softens 
IMF Deputy Dan Katz Visits China as Key Economic Review Nears 
BOJ Governor Ueda Highlights Uncertainty Over Future Interest Rate Hikes 
Australia’s Economic Growth Slows in Q3 Despite Strong Investment Activity 
Germany’s Economic Recovery Slows as Trade Tensions and Rising Costs Weigh on Growth 
In May, the US trade deficit widened to USD 41.1 billion from April’s deficit of USD 37.4 billion. The deficit was more than market projections’ USD 40 billion. May’s deficit shows a drop of USD 314 million in the value of exports of goods and services in conjunction with a rise of USD 3.4 billion in imports.
In spite of trade deficit widening in May, net trade is expected to be just a small drag in the second quarter. A significant strength in exports in April is expected to be sufficient to help export growth surpass import growth in the second quarter, noted TD Economics.
The US economic growth will continue to be weighed on by the global economy, even more so after the Brexit vote. As long as uncertainty continues to be high, safe haven flows to the US are expected to exert upward pressure on the dollar.
Net exports are expected to negatively contribute 0.7 percentage points from the real GDP growth in H2 2016, according to TD Economics. This is likely to be countered by persistent strength in consumer spending, underpinned by weak consumer price inflation and tightening of labor market. The US economy is expected to continue growing modestly.
Nominal exports of the country declined 0.2 percent month-on-month in May. Exports of both goods and services declined, falling 0.2 percent and 0.1 percent respectively. Meanwhile, imports rose 1.6 percent on sequential basis. Imports of goods rose 1.9 percent, whereas services imports remained almost flat, rising 0.02 percent.
Real goods exports, adjusted for inflation, dropped 1.5 percent, whereas real goods imports increased 1 percent. The decline in goods exports was broad based; however, the drop was not unexpected given solid expansion in April. Imports’ growth was majorly due to consumer goods. This was also not unexpected given the persistent strong domestic fundamentals.
