The Escalation of Trade Conflict Continues. We Expect an Inflation Report in the US

The American currency strengthened against the basket of majors yesterday. On Tuesday, the US administration announced its intention to introduce an additional 10 percent duties on import of Chinese goods. The Chinese stock market collapsed. The US dollar index (#DX) closed in the positive zone (+0.67%). However, the growth of the US dollar may be restrained, as investors are afraid of a fullscale trade war.

Yesterday, the Bank of Canada, as expected, raised interest rate by 25 basis points to 1.50%. Also yesterday, the producer price index in the US for June was published, which counted to 0.3%, while investors forecasted a value of 0.2%. Today, financial market participants expect an inflation report in the US, which may affect the further alignment of forces on currency majors.

The “black gold” prices are recovering after the decline the day before. At the moment, futures for the WTI crude oil are testing a mark of $70.65 per barrel.

Market Indicators

Yesterday, the major US stock indices closed in the negative zone: #SPY (0.73%), #DIA (0.86%), #QQQ (0.51%).

At the moment, the 10year US government bonds yield is at the level of 2.852.86%.

Publication of the account of the ECB monetary policy meeting at 14:30 (GMT+3:00);Inflation report in the US at 15:30 (GMT+3:00).

by JustMarkets, 2018.07.12