G7 had started lately on Friday (GMT+7) but trade tension seemed increasing at the beginning. U.S. stock market opened lower on Friday as investors focused on a fresh tweet by Trump, who accused France and Canada of levying "massive tariffs" and establishing "non-monetary barriers." Then the American president threw G7 summit into chaos by suggestion Russia to rejoin. In my view, the most Asian stock markets may trade mixed on Monday because of the unclear meeting G7 and other meetings in this week: FOMC-13th June, ECB-14th June and BoJ-15th June.
While euro closed above 1.1760 on last Friday, trend reverse is still working as euro stay above support line on Fibo level. I think euro may get the positive support from economic data before Thursday because investors may think optimistically of ECB meeting and focus on next policy and QE. German economic sentiment at 16.00 p.m. on Tuesday may release better than forecast because member of ECB – Peter Praet signaled the better economic growth in European Union.
In contrast, British pound maybe weaker comparing with euro. GBP/USD may start the week by moving in the narrow frame because U.K. economic indices may not give strong support: manufacturing production and Trade balance on Monday which I think they may release lower than forecast as the most released indices in April were lower and trade balance may reduce by the U.S. tariff. Furthermore, other British data: average earning in April may reach forecast and claimant count change may edge higher than forecast, if comparing last year data which U.K. labor market was strong in second quarter. I think on Wednesday pound may swing wider because of the inflation data is focused: PPI and CPI in May at 15.30 p.m. which forecast rise up and investor may concern about hiking the interest rate so pound may rise above 1.3530 dollar, if CPI release 2.5% or higher.
Investors keep focusing on FOMC statement and interest rate which may increase to 2.0% but investor want to get more signals of more rising interest rate because U.S. economy is growing up. Inflation also may rise up: core CPI in May at 19.30 on Tuesday forecasts 0.2% so 10-year U.S. bond yield may rise above 3% again and dollar may hold steady before Fed meeting on Wednesday.
Meanwhile, Brent may hold steady above 74 USD per barrel waiting OPEC monthly report at 18.20 p.m. on Tuesday. But Brent may fall to the support line on Wednesday, if U.S. crude oil inventories may rise more than forecast. According to the last week data, U.S. crude oil, gasoline and refined oil were rise up a lot so this week data may not reach the forecast at -1.824 million barrels. Bitcoin price may continue moving sideways but the current frame is narrow between 6,500-8,000USD. It seems Bitcoin is building triangle pattern which now maybe the fifth wave.
By Niramon Nitnitiphruet
Financial analyst, Olymp Trade.