Daily Analysis - 08/06/2018
Risk sentiment has soured today as investors shift their focus on trade concerns as the G7 meeting gets underway today and tomorrow. The Stoxx Europe 600 Index dropped 0.6 percent at the open. European stocks came under pressure upon opening, while the safe haven yen gained ground. Tensions have already arisen between U.S. President Donald Trump against Canadian President Justin Trudeau and French President Emmanuel Macron.
Investors flocked to the safety of the yen due to uncertainty in the markets, pressuring the USD/JPY lower to 109.40. U.S. President Trump was back on Twitter overnight, causing a trade spat. Ina nutshell, the G7 may turn to G6 as the White House confirmed that Trump will leave the G7 summit early. Meanwhile, all eyes will be on the North Korea Summit in Singapore next week (June 12) where Trump will meet Kim Jung-Un.
The Australian dollar fell heavily due to risk aversion, as it is often seen as a barometer of risk sentiment. Meanwhile, renewed concerns over emerging markets and has also acted as a catalyst for the aussie’s weakness. The currency has almost given up all gains made this week.
Crude oil rose above $66 a barrel on Thursday as the market feared a shortage in global supply due to ongoing issues in oil-rich Venezuela. The question is whether the bounce higher was temporary retracement and the recent downtrend may continue. All eyes will be on be on the all-important OPEC meeting in Vienna on June 22-23.
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