Day Ahead: Investors to Focus on Trade, Sweden, OPEC, UK, and EU

Source: Forex News

Today, investors will
continue to focus on the ongoing trade conflict between the United States and
China. This is after China announced that it will put additional tariffs on
goods worth more than $60 billion. These tariffs will be targeted at some industries
like agriculture and manufactured goods. Traders will continue to look at the
performance of key assets in relation to the trade war. Global stocks and the
yuan have been the worst-performing assets in the financial market after the
crisis started as shown below.

Traders look towards
Sweden. Earlier today, the country reported that its unemployment rate declined
to 6.7%. In March, the unemployment rate was at 6.9%. Later in the day, the
country will release the consumer price index data. The CPI for April is
expected to increase by 2.1% from the previous 1.9%. On a MoM basis, the CPI is
expected to rise by 0.6%, from the previous 0.2%. The CPI at constant interest
rates is expected to rise by 1.9%. Ahead of these data, krona is trading as
shown below.

Focus will also be on the
sterling. In recent days, the sterling has declined sharply after chances of
Theresa May remaining in power decreased. This is because of the rise of Nigel
Farage’s Brexit party. Most people in her Tory party have said that they will
vote for Farage’s party in the EU elections. Today, the country will release
the employment data. The numbers are expected to show that the unemployment
rate in March remained unchanged at 3.9%. The claimant count change is expected
to decline to 24.2 while average hourly earnings are expected to decrease a
bit. The employment change in the past three months is expected to increase by
141K. The chart below shows the performance of the sterling ahead of this data.

Crude oil is also noteworthy
as OPEC releases its monthly report. The report is important because it tells
investors on the supply and demand dynamics of OPEC members. Every day, OPEC
produces more than 30 million barrels of crude oil. An increase in OPEC
production would mean lower crude oil prices. Traders will want to know the
impact of Iran’s exit after the US imposed sanctions on its industry. The chart
below shows the performance of Brent and WTI ahead of this data.

Traders will also focus
on the European Union ahead of key data from Germany. The CPI is expected to
remain at 2.0%. The harmonized CPI too is expected to remain unchanged at 2.1%.
Meanwhile, the ZEW economic sentiment for May is expected to rise to 5.1 while
the ZEW current conditions are expected to increase to 6.0. The chart below
shows the performance of the euro ahead of the data.

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