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8
Jun

US and Canadian Trade Balance, Chinese Inflation Data

calendar 08/06/2021 - 07:53 UTC

The US dollar traded overall weaker again against other major currency pairs on Monday as seen in the performance of the USDX, while strongly recovering in the morning hours on Tuesday.

Despite the weakness of the dollar, the USD/ZAR reversed higher from its two years low ahead of the release of the GDP for Q1 scheduled for Tuesday morning.

The sell-off in crypto markets on Monday afternoon further accelerated in the late evening with the total crypto market cap reaching by Tuesday morning just around $1.55 trillion, compared to the more than $1.7 trillion on Monday. Bitcoin was down at its lowest level in two weeks as the biggest crypto currency in terms of market cap declined pretty much following the overall trend in other crypto markets with its 7-day performance of around minus 12 per cent being worse than for example Ethereum with minus eight per cent or Dogecoin, which on a weekly basis lost just around one per cent.

Equity markets were showing a mixed picture by Tuesday morning with indices like the US Tech 100 or Germany 30 coming down from the spike seen at night, while the Italy 40 continued to rally towards yet another post-pandemic high. In Asian markets the China A50 moved lower, while the India 50 (USD) traded in the range seen on already on Monday.

On Tuesday trade balance data will be published in both Canada and the United States. Later in the Asian-Pacific trading session the Chinese consumer price index (CPI) and producer price index (PPI) statistics can be expected as well as consumer sentiment and home sales data from Australia.

EUR/USD

The EUR/USD pair ended the day once again in the green, briefly trading again at the 1.22-mark. After the gains of the euro during the start of the US trading session, a slow and relatively steady retracement set in in the late afternoon further pushing the rate lower over the course of Tuesday night.

German data on industrial production in April was with a decline of one per cent on a monthly basis again a disappointment after manufacturers’ orders were also reported 0.2 per cent lower back on Monday.

Later today retail sales statistics from Italy, the revised EU GDP numbers for Q1, as well as the German ZEW survey on current conditions and business expectations will be released.

EUR/USD

Gold

Gold prices recovered quite steadily over the course of trading on Monday with a spike during night hours on Tuesday pushing the price clearly above $1,900. An uptrend on Monday with a reversal on Tuesday night was also observed in silver and platinum markets, while palladium traded once again side-ways.

Gold prices could be affected also by expectations of inflation and more and more are warning about a significant and not necessarily “transitionary” inflation as it has been recently called. Such warning resonated through the media like CNBC with economists from Deutsche Bank warning that it could cause a crisis in the years ahead as central banks like the US Federal Reserve are focusing on economic recovery, while tolerating higher inflation.

Gold

WTI Oil

After peaking on Monday night, oil prices continued trailing lower, with WTI crude oil moving further below the $68-per barrel level by Tuesday morning.

Fundamentals on the demand side still look positive, such as the daily TSA checkpoint travel numbers which hit for Sunday a new post-pandemic record of 1.985 million and India easing lockdown rules as the number of new cases is on the decline.

On Tuesday the American Petroleum Institute (API) publishes its weekly statistical bulletin, while the Energy Information Administration (EIA) releases its weekly data on crude oil, gasoline and distillate stockpile changes on Wednesday.

WTI Oil

US 500

Performance among the best-known US stock indices was quite mixed on Monday with the US Tech 100 and the small-cap index US 200 moving higher, while the US 500 and US 30 ended the day in the red.

The US Biotech ETF (+3.57%) strongly outperformed many other industries in part thanks to the significant rise in value of its component Biogen, which closed up by more than 38 % following the approval of its drug against Alzheimer’s by the US FDA. Eli Lilly (+10.34%), which is also independently developing a drug against this condition, was then the second best performing stock included in the S&P 500 index that day.

Relatively few listed companies are still due to publish their quarterly results this week. Among them will be Thor Industries and Momo on Tuesday, Campbell Soup on Wednesday and Chewy on Thursday.

US 500

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