Source: Forex News
Last week, the Dow gained by 2.46% while the S&P 500 rose by 2.52%. This was one of the best performance for the indices this year. The gain was fueled by the easing trade tensions from the United States and the optimism of a faster growth. In Europe however, things were not very exciting especially after the failed attempts by the leaders to change the mind of the US on the Iran deal. The market was concerned that European companies operating in Iran will face significant barriers to operate if the US fails to provide them with exemptions.
During the weekend, investors were still thinking about the Iran deal and the implications of the deal without the US. Many experts on the global geopolitical suggested that the deal will only be viable if the Trump administration gave exemptions to European companies. If it fails to do that, Iran will see no benefits to stay in the deal. Over the weekend, the Iranian leader said that the country would remain in the deal.
Another major happening during the weekend was the elections in Iraq, which neighbors Iran. The election was a blow to Prime Minister Haider al-Abadi, a leader who has been close to Western leaders. In the election, the winner was Moqtada al-Sadr, a communist cleric, whose forces once fought against the US military. While Abadi might not become the prime minister, his victory in the election will make him the most powerful person in the country.
On Sunday, Donald Trump sent a tweet that gave the market hopes on a compromise on the ongoing trade negotiations. In the tweet, the president wrote that he was in direct talks with Chinese president on the fate of ZTE. This is one of the largest technology company in the country. Its products include smart phones and other telecommunication products. Two weeks ago, the US announced that it would ban ZTE’s products in the country after the company violated previous Iran sanctions. The new deal is likely to please investors who are now seeing an opening in the ongoing trade issues.
On Sunday, two terrorist events increased risks. On Sunday, an Islamic terrorist with a knife killed a person in France and injured four others. In Indonesia, a family of Islamic terrorists, with a car bomb, a suicide vest and a motorcycle-borne bomb attacked three churches. Late in the evening, Indonesia was also a victim of another terrorist attack. All this comes a few days after the US released a statement saying that its forces had arrested four senior ISIS leaders.
Over the weekend, investors focused on geopolitical issues focused also on the announcement that the North Korea and the US summit will take place in Singapore, on June 12th. Investors continued to discuss this issue with the view of coming up with the potential scenarios.
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