The Dollar Index Has Moved Away from Local Lows. Trade Tensions Are still High. We Expect the ECB Meeting

The US dollar is still under pressure against a basket of major currencies. Despite this, the US dollar index (#DX) closed yesterday in the positive zone (+0.26%). Positive statistics on economic activity in the non-manufacturing sector of the US supported the greenback. Meanwhile, the Japanese yen has strengthened against the increasing investor concerns about global trade disputes and the growing demand for safe-haven currencies. As it became known, negotiations between the US and Mexico were not progressive. "Immigration discussions at the White House with representatives of Mexico have ended for the day. Progress is being made, but not nearly enough ... Talks with Mexico will resume tomorrow with the understanding that, if no agreement is reached, Tariffs at the 5% level will begin on Monday, with monthly increases as per schedule," – wrote D. Trump on Twitter.

Yesterday, the Fed's Beige Book was published, according to which the growth rate of economic activity was generally restrained from April to mid-May in the US. In the previous period, growth rates were assessed as weak. Uncertainty in world trade relations, as well as a lack of skilled staff are the main risks for the economy. Today, the financial market participants are focused on the ECB meeting. It is expected that the regulator will keep the key marks of monetary policy at the same level. We recommend paying attention to the speech by the head of the Central Bank, Mario Draghi.

The "black gold" prices recovered part of the losses after a sharp collapse the day before. At the moment, futures for the WTI crude oil are testing the mark of $52.00 per barrel.

Market Indicators

Yesterday, the aggressive purchases were observed in the US stock market: #SPY (+0.87%), #DIA (+0.82%), #QQQ (+0.74%).

The 10-year US government bonds yield is consolidating. Currently, the indicator is at the level of 2.11-2.12%.

- Eurozone GDP at 12:00 (GMT+3:00);
- ECB interest rate decision at 14:45 (GMT+3:00);
- Ivey PMI at 17:00 (GMT+3:00).

We also recommend paying attention to the speeches by the FOMC representatives.

by JustMarkets, 2019.06.06

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.