Mario Draghi tried to reassure investors

Daily Analysis - 19/06/2019

Draghi could cut interest rates

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Mario Draghi the President of European Central Bank (ECB) supported the fact that he is probably going to lower interest rates once more or grant additional asset purchases if inflation doesn’t approach its goal.

While Draghi was speaking at the Forum in Sintra, Portugal, he was in a defiantly dovish mood. He said that if the economic condition worsens in the coming months the bank will announce additional stimulus.

Draghi stated. “In the absence of improvement, such that the sustained return of inflation to our aim is threatened, additional stimulus will be required.”

The euro fell sharply 0.2% versus the greenback while Draghi was delivering the comments. The U.S. 10-year Treasury yield fell to its weakest level since 2017 at 2.0% while the German 10-year bond yield fell 0.30% for the first time.

Asian stocks were mostly higher


Tomorrow the Fed is programmed to begin a two-day monetary policy conference. Investors will definitely watch for signs regarding a potential rate cut. In the meantime, hundreds of U.S businesses want President Donald Trump’s government to stop increasing tariffs on China.

Asian markets were essentially raised on Tuesday. The Shanghai composite was higher at 2,890.15 while the Shenzhen component increased 0.27% to 8,804.30. On the other hand the Nikkei 225 slid more than 0.7% to close at 20,972.70.

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Gold gives back profits


On Tuesday the famous safe haven Gold fell following U.S. President Donald Trump's confirmation that he will meet with Chinese President Xi Jinping at an international summit. In a tweet, Trump said that he had a “very good telephone conversation” with China’s Xi.

That fact supported expectations that a resolution regarding the U.S.-China trade conflict could be near.

At the Beginning of the session, the yellow metal went up 1% after the United States and central banks in Europe indicated monetary easing.

Spot gold increased 0.2% to $1,342.14 per ounce.

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US-China trade talks supports oil


On Tuesday Oil increased more than $1 a barrel following U.S. President Donald Trump's statement, that he is probably going to meet with Chinese President Xi Jinping at the G20 summit later this month.

Another support for the oil are the Middle East tensions following last week’s tanker assaults but also the U.S. plan to transfer more troops to the Middle East. Brent crude futures grew about $1 to $62.01 a barrel.

U.S. West Texas Intermediate crude futures advanced more than $1.7 to $53.68 a barrel.

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