Daily Analysis - 04/06/2019
On Monday St. Louis Federal Reserve president James Bullard stated that a probable U.S. interest rate cut “may be warranted soon” due to the increasing danger of an economic growth retraction created by the global trade tensions and the soft U.S. inflation.
James Bullard said that is very difficult for the Fed to keep up with every new development in these fast-changing conditions. The Fed “faces an economy that is anticipated to develop more slowly going ahead, with some risk that the retardation could be sharper than expected due to ongoing global trade regime uncertainty", he said.
On Tuesday Gold was steady, floating near a 120-day top reached in an earlier session. That happened while global retardation fears inspired by trade disputes and the expectation of a U.S. interest rate cut boosted the safe-haven demand. U.S. gold futures continue steady at $1,328.19 an ounce while the Spot gold fell 0.2% at $1,322.26 per ounce, after reaching its highest level since Feb. 27 at $1,327.88.
On Tuesday Oil was pressed by economic retardation that has begun to affect fuel consumption although some comfort came from a Saudi Arabian report that consensus was developing with other producers overextending supply cuts. Brent crude futures fell 22 cents, to $61.05 while U.S. West Texas Intermediate (WTI) crude futures were down 17 cents to $53.07 per barrel.
On Tuesday afternoon, Chinese stocks weakened as did the rest of Asian markets exchanges due to continuing global trade fears.
Japan’s Nikkei 225 fell 0.15% while Softbank Group fell more than 3%. The Topix index also fell by 0.18%. South Korea Kospi was largely flat. Australian ASX 200 went up more than 0.22% after the Reserve Bank of Australia (RBA) published that it was lowering its cash rate by 25 basis points to 1.25% on Tuesday.
