FINANCIAL MARKET REVIEW FOR AUG 03, 2018 Vinson Financials

FINANCIAL MARKET REVIEW FOR AUG 03, 2018

Gold prices were little changed early Friday, having hit a one-year low in the previous session on a resilient U.S. dollar.

Spot Gold XAUUSD continues to move on a steady downtrend path touching new 2018 lows on two back to back sessions at $1207.20 on Tursday and $1206.62 on Friday respectively. XAUUSD is currently trading at $1207.97 up 0.02% while US Gold Futures GCcv1 is trading at $1216 an ounce down 0.33% in Asian hours today. For the week, the precious metal was down more than 1 percent, in what could be its fourth straight weekly drop. The dollar stayed firm against the yuan and a basket of currencies after reaching two weeks high as worries about an escalation in trade tensions between the United States and China supported US Greenback. Support for gold disappeared as a stronger U.S. dollar weighed on investor appetite. The greenback was also supported by strong U.S. economic data and outlook for higher interest rates.

Higher U.S. rates tend to boost the greenback, in which the metal is priced. Most recent data suggests continued weakness for gold amid a stronger US Greenback.

Asian stocks inched up on Friday following a tech-led rise on Wall Street, although the latest exchange of trade threats between Beijing and Washington capped gains and drove safe-haven flows to the dollar, which hovered near a two-week high.

There was more bleeding, with the CSI300 and Hang Seng down 1.08% and 0.26% respectively, while the Nikkei bucked the trend with an early 0.14% rise.

For the ASX200, early gains were given up, with upbeat retail sales figures failing to support as economic indicators out of China continued to point to a further slowdown in the 3rd quarter.

Technology stocks pushed the S&P 500 and Nasdaq higher on Thursday, driven by Apple shares as the iPhone maker became the first publicly traded U.S. company worth a trillion dollars.

In foreign exchange, the dollar index against a basket of six major currencies extended its overnight gains and rose to a two-week high of 95.209.

Trade tensions were seen driving demand for the U.S. currency, with a slide by the pound providing an extra lift.

Sterling dropped more than 0.8 percent on Thursday despite the Bank of England lifting interest rates, after Governor Mark Carney said monetary policy needed to “walk not run” and expressed concern about the risks of a cliff-edge Brexit.

The euro was slightly lower at $1.1584 following a loss of 0.6 percent the previous day.

Bubbling concerns over Italy weighed on the euro, with the country’s bond yields rising to two-month highs following media reports of a government meeting on the budget revived market concerns about tensions within the ruling coalition.

The dollar added 0.1 percent to 111.73 yen, having gained about 0.6 percent this week. The dollar received a big boost against the yen earlier this week after the Bank of Japan tweaked its monetary policy but retained its commitment to keeping interest rates low.

For the EUR, it’s a relatively busy day ahead, with key stats through the morning including finalized service sector PMI numbers out of the Eurozone, France and Germany and fresh service sector PMI numbers out of Italy and Spain, with June retail sales figures out of the Eurozone also due out and likely to influence.

vinsonfinancial.com | (+357) 250-288-6163 | general@vinsonfinancials.com

FINANCIAL MARKET REVIEW FOR AUG 03, 2018

While the stats are on the heavier side, focus will likely be on retail sales figures, barring material deviation from prelim service sector PMI numbers out of the Eurozone, Germany’s retail sales figures suggesting a bounce back in consumption at the end of the 2nd quarter.

At the time of writing, the EUR was up 0.03% to $1.1589, with today’s stats and the Oval Office providing direction through the day.

For the Pound, economic data through the session is limited to July’s service sector PMI. Following Super Thursday, there’s unlikely to be much to support a bounce back to $1.31 levels ahead of a resumption of Brexit negotiations in midAugust, with any weak numbers likely to weigh heavily on the Pound.

At the time of writing, the Pound was down 0.01% to $1.3016, with today’s service sector PMI and further market reaction to Thursday’s BoE press conference the key drivers through the day.

Across the Pond, it’s the Greenback’s turn to steal the spotlight with July’s wage growth and nonfarm payroll figures the key stats for the day. Other stats through the day include June trade figures and July service sector PMI numbers, the Dollar likely to be more sensitive to the market’s preferred ISM numbers and wage growth figures.

While forecasts are for marginally slower growth in the services sector, anything in line with or better than forecast should be Dollar positive, though much will depend upon the sub-indexes, with new business and labour market conditions relevant.

At the time of writing, the Dollar Spot Index was down 0.02% to 95.153, with today’s stats and the Oval Office to provide direction through the day.

For the Loonie, June trade figures are scheduled for release that will provide the Loonie with direction, a forecasted narrowing to the trade deficit a positive, though much will continue to depend on market sentiment towards NAFTA and whether the Canadian government can be rid of recent tariffs on steel and aluminium and make progress with the U.S administration on NAFTA. At the time of writing, the Loonie was up 0.09% to C$1.3011 against the U.S Dollar.

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vinsonfinancial.com | (+357) 250-288-6163 | general@vinsonfinancials.com