The US dollar is strengthening against the basket of major currencies amid good news regarding trade relations between the US and China. US President Donald Trump announced that he was ready to sign a trade agreement with China. The President said on his Twitter that the United States would make an agreement with China when the time was right, and also emphasized friendly relations with the President of the People’s Republic of China Xi Jinping. At the same time, Trump said that there were still minor differences between countries. The dollar index (#DX) closed in the positive zone (+0.19%).
Yesterday, important economic statistics from the UK and the Eurozone were also published. The British pound weakened against the US dollar amid weak labor market data. Thus, the average earnings, including bonuses, increased by only 3.2% in April, while experts expected growth by 3.4%. Initial jobless claims rose by 24.7K, which turned out to be higher than the forecasted value of 24.2K. At the same time, the unemployment rate fell from 3.9% to 3.8% in March. German ZEW economic sentiment fell by 2.1 in May, although experts expected growth by 5.1.
The euro weakened against the dollar after Deputy Prime Minister of Italy announced that the country was ready to break the European Union’s budget rules on debt levels if necessary. Matteo Salvini, Deputy Prime Minister of Italy, said: “Until we arrive at 5% unemployment, we will spend everything that we should and if someone in Brussels complains, that won’t be our concern.”
Today, during the Asian trading session, weak economic data have been published in China. Thus, industrial production grew by only 5.4% in April instead of 6.5%.
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The “black gold” prices show negative dynamics. At the moment, futures for the WTI crude oil are testing the mark of $61.10 per barrel. At 17:30 (GMT+3:00) data on crude oil inventories will be published in the US.
Yesterday, the bullish sentiment was observed in the US stock market: #SPY (+0.90%), #DIA (+0.92%), #QQQ (+1.10%).
The 10-year US government bonds yield is declining. Currently, the indicator is at the level of 2.39-2.40%.
– Preliminary data on Eurozone GDP at 12:00 (GMT+3:00);
– Statistics on US retail sales at 15:30 (GMT+3:00);
– Inflation Report in Canada at 15:30 (GMT+3:00).