Negative sentiment may ease – Back to focus on economic data and earning

Trump raised the trade tension with a threat to impose tariffs on all Chinese import goods valued $500 billion unless China agrees to make structural changes to the technology transfer, industrial subsidy and joint venture policies last Friday. The G-20 meeting of finance ministers also announced that trade tensions could undermine the global economy. I think the trade war tension may still exist for longer time even if China called for negotiation and investors may get use to this negative factor so markets may recover faster than in the past. Most of stock markets in Asia traded mix on Monday so it may express that U.S. threat did not affect as much as before.
Investors are waiting with high expectations of better results than forecast so the psychology may affect the shares’ price after earning results release. I think if the result just reaches the forecast or worse, stock price may fall hard. But if the report is better than expectations, shares may rise.
EUR/USD had swung in the narrow frame 1.1700-1.17500 points early morning on Monday. Trump’s comment on Fed interest rate hike may have less influence but some FOMC members already express the worries of trade war to the increasing of inflation in the United States that rising interest rate 2 more times in 2018 may reach the hard drop of the U.S. economic growth next year. In my view, this factor expresses the uncertainty and the U.S. dollar may become weaker.
Despite all of this, Euro economy also may be affected by the trade war and EU took measures against steel imports maximum 200 days last week. Moreover, German and EU economic data in July forecasts a little change so euro may not have a lot of support factors to break the resistant line. EUR/USD may continue to move flat 1.1700-1.1800 points but if euro falls lower than 1.1700 dollars, it may head down to 1.1600 dollars.
G-20 member countries are looking for reviewing a global anti-money laundering (AML) standard on cryptocurrency which deadline in October. While Bitcoin price and Altcoin rose after CEO BitMex predicts that Bitcoin will rocket 50,000USD by the end of 2018.
Economic indices in focus:
• Germany: Manufacturing PMI and Service PMI (Jul) at 14.30 p.m.
• EU: Manufacturing PMI and Service PMI (Jul) at 15.00 p.m. and EU finance ministers meeting
• USA: Manufacturing PMI and Service PMI (Jul) at 20.45 p.m.

By Niramon Nitnitiphruet
Financial analyst, Olymp Trade.

Olymp Trade Review