Top 5 Things to Know Before You Start Trading
This Thursday trading is affected by the US – North Korea Conflict, with safe havens such as gold rising. Oil prices are also higher.
1 – US Inflation Data in Sight
After the volatility that was caused by the hostile rhetoric between North Korea and US President Donald Trump, as well as the volatility caused by the Positive US Jobs data on Tuesday, which caused a whipsaw action in all currencies, markets will focus their attention on US inflation data for signs of improvement in the U.S. economy, which could raise the prospect of the Federal Reserve keeping to its plan to tightened monetary policy later this year.
2 – Safe Havens Trading Higher Due to Trump & N. Korea Conflict
The continued rise in tensions between the U.S. and North Korea drove gains in safe haven assets with USD/JPY breaking below 110 and EUR/CHF below 1.1350. Also Gold touched a 2-month high at $1278. As a result of soaring risk sentiment and Japanese Yen (JPY) strength, equities were generally lower in the Asian session with the Nikkei down more than 1.5%.
3 – GBP Trading Lower
GBP/USD once again crept lower than 1.30 after hitting 1.3267 last week. The pair, which has bee supported lately on the view that the Bank of England (BOE) would raise rates this year, started tumbling after policymakers decided to keep rates unchanged 6-2 last week, while also shifting their growth and inflation targets lower for this year. Having hit an 11-month high against the US dollar (USD) before the BoE meeting, Sterling has since lost around 2%. A rate hike now seems to be a 2018 story.
4 – Oil Prices Higher
Oil prices were about 1% higher on Wednesday after a report showed U.S. refineries processed record amounts of crude in the latest week, eating into inventories, although a surprise jump in gasoline stockpiles limited price gains.
5 -What’s Ahead?
Going forward, pay attention to the ping-pong of threats between the US and North Korea, Producer Price Inflation in the US today, and even more importantly the Consumer Price Inflation tomorrow in the US. Any uptick in inflation will certainly boost the USD, while a lower reading will almost certainly give resumption to the weak Dollar rally which is the theme so far this year.