$200Billion – Trade tension rises

The Trump administration released a list of thousands of Chinese imports 10% tariffs on an extra $200 billion dollar on Tuesday. This factor makes investors fear about trade war and slowdown world economy. In my opinion, investors keep focusing on trade war: 16,000 million of 50,000 million the first tariff and Chinese reaction. China may need to negotiate with America as the USA is the biggest export market and China will not be able to charge 200 billion on U.S. import goods. According to last year trade volume, China imported U.S. good on 130 billion dollars and USA imported Chinese goods 505 billion dollars. As the result, investors may focus on the positive trade negotiation between China and USA.
Japanese yen got support from rising trade tension so dollar fell to 110.76 early on Wednesday and then rose above 111 points. I think U.S. dollar may hold steady supporting by the rising bond yield. Today, dollar may hold steady await inflation data as it will affect to Fed interest rate decision. In my view, the U.S. inflation in June may reach the forecast or decrease a little bit lower so USD/JPY may swing around 110.7-111.3 points. Brent may continue swing around 77-79 dollar per barrel if the U.S. softens stance on Iranian sanction.
Chinese Central Bank has again issued strong statements against initial coin offerings (ICOs) on Monday. The Internet Finance Rectification Working Group reiterated that ICOs "disguised" ICOs and crypto asset trading are illegal in the country, and represent illicit forms of fundraising and securities issuance. Bitcoin price fell lower than 6,500 dollar on Tuesday and it may fall to 5,800 again, if it cannot hold above 6,200 dollar.
Economic indices in focus:
• Europe: Industrial Production (May) at 16.00 p.m. and ECB Publishes account of monetary policy meeting at 18.30 p.m.
• Germany: CPI (Jun) at 13.00 p.m.
• USA: CPI and Core CPI (Jun) at 19.30 p.m.

By Niramon Nitnitiphruet
Financial analyst, Olymp Trade.

Olymp Trade Review