Hezbollah fires rocket barrages into Israel after deadly Beirut strikes    British man captured while fighting with Ukraine    Far-right candidate takes shock lead in Romania presidential election    Indians risk it all to chase the American Dream    Al Ittihad claims top spot in Saudi Pro League after victory over Al Fateh    Do cigarettes belong in a museum?    Saudi Arabia joins international partnership initiative to boost hydrogen economy    Riyadh Emir inaugurates International Conference on Conjoined Twins in Riyadh    Saudi delegation participates in the 7th U20 Deans Summit in Brazil    Al-Jubeir discusses with EU officials enhancing bilateral cooperation    GASTAT: Non-oil exports up 22.8% in September 2024    Saudi Arabia to host 28th Annual World Investment Conference in Riyadh    Saudi Arabia allows licensed flour milling companies to export flour    Al Khaleej stuns Al Hilal with 3-2 victory, ending 57-match unbeaten run    SFDA move to impose travel ban on workers of food outlets in the event of food poisoning    Al Okhdood halts Al Shabab's winning streak with a 1-1 draw in Saudi Pro League    Saudi musical marvels takes center stage in Tokyo's iconic opera hall    Al Khaleej qualifies for Asian Men's Club League Handball Championship final    Katy Perry v Katie Perry: Singer wins right to use name in Australia    Sitting too much linked to heart disease –– even if you work out    Order vs. Morality: Lessons from New York's 1977 Blackout    India puts blockbuster Pakistani film on hold    The Vikings and the Islamic world    Filipino pilgrim's incredible evolution from an enemy of Islam to its staunch advocate    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Consolidation as Trump points at ‘complete decoupling' with China
Published in The Saudi Gazette on 19 - 06 - 2020

GENEVA — Asian stocks are set to close the week on a positive note, after having swung between hope of post-COVID recovery and fear of a second wave contamination this week. US equities were mostly flat on Thursday. Nasdaq led gains as investors felt more comfortable buying tech stocks, if they were to buy anything, amid record surge in new COVID-19 cases in some states in the US.
Meanwhile, Donald Trump said in a tweet Thursday that ‘the US certainly does maintain a policy option, under various conditions, of a complete decoupling from China.' His words didn't impact the market mood, though a complete decoupling between the US and China would significantly hit the US companies, already battered by the pandemic.
Also, Thursday's data was little satisfactory. The weekly jobless claims in the US rose 1.5 million last week hinting that business reopening didn't have a flourishing impact on jobs just yet.
In Australia, the retail sales jumped by a record 16.3% m-o-m in May as consumers rushed to stores following the easing of Covid-19 lockdown measures. The Aussie remained little changed against the greenback.
But from a technical perspective, we are about to see a formation of golden cross on the AUDUSD daily chart, where the 50-day moving average is about to cross above the 200-day moving average. The latter bullish formation could enhance tactical long positions in AUDUSD and encourage another move above the 0.70 mark.
A side note before we move forward. While the post-COVID jump in global retail sales should remain short-lived, the normalization in economic activity and rising oil prices will certainly have a significant inflationary effect across the world economy.
If the recovery doesn't follow the pace of the pickup in consumer prices, the central banks may find themselves stuck with ultra-unorthodox policies, a thin margin for more action, rising inflation and high employment.
In summary, the stagflation is the greatest risk of today's ultra-loose monetary policies and may hit the emerging markets heavier than the G10 economies.
The strong US dollar gains strength against most currencies, except the yen and the Swiss franc as de-risking continues. Gold remains stoic faced with the lack of clarity in market direction.
The black gold, however, gains traction on prospects of improved demand/supply dynamics despite the rising second wave worries and higher US inventories. A successful attempt on $40-offers should pave the way toward the next bullish target, $45.50, the 200-day moving average.
The Swiss National Bank (SNB) maintained status quo at Thursday's monetary policy meeting. The Bank of England (BoE) kept the interest rates unchanged and expanded the asset purchases program by 100 billion pound as expected. What was less expected is the BoE's hint to unwind its QE program at a significant pace over time.
The latter certainly wiped out the expectation of further expansion in BoE purchases and tempered the BoE doves in the wake of the announcement. The GBPUSD shortly retreated below the 1.24 mark.
Firmer US dollar and somewhat frayed BoE doves are weighing on sterling, but the downside should remain limited given that the real deadline in Brexit negotiations seem to have been postponed to October, although the British and EU negotiators have six weeks of intense negotiations ahead.
The barriers remain intractable, but there is hope that the pandemic will encourage Johnson to walk out the EU with a trade deal instead of empty hands by the end of this year.
Activity in FTSE futures (+0.19%) hint at a further consolidation near 6230p (the 100-day moving average) on the back of firmer energy prices and a softer sterling.
The EURUSD cleared the 1.12-support and rebounded from 1.1185 on the back of a stronger US dollar. The pair will likely extend weakness to 1.1160 Fibonacci support, which should distinguish between the past month's positive trend and a bearish reversal.
— The writer is senior analyst at Swissquote Bank


Clic here to read the story from its source.