Source: Forex News
This week, investors continued looking
at the ongoing trade war between United States and China. In an interview,
Donald Trump said that the country will add tariffs on all imported goods from
China if the two leaders don’t meet at the G20 summit in Japan. China responded
by saying that the tariffs and trade restrictions put in place by the US will
empower it to be self-reliant. In recent years, the Chinese government has
increased its investments in high-tech products like chips that the US has long
Yesterday, tensions in the Middle
East continued after attacks on two oil tankers that were transporting crude
oil to other countries. This led to a sharp increase in the price of crude oil
as investors started to think about the disruption in supplies. Two thirds of
all the world’s sea-borne oil passes in those waters. In response, the US
announced that the ships were attacked by Iran without providing any evidence.
Iran denied the allegations and blamed the US for starting to initiate
instability in the Middle East region. This week, data from the American
Petroleum Institute (API) and Energy Information Administration (EIA) showed
that oil inventories were rising faster than expected.
On interest rates, Turkey and
Switzerland were the main central banks that delivered their rates decision this
week. In Turkey, the central bank left the one-week repo rate unchanged at 24%.
The late liquidity window rate was left unchanged at 24%. The same was true
with the overnight lending and borrowing rates, which was left unchanged at
22.50%. Yesterday, the Swiss National Bank left rates unchanged at the current
-0.75%. This was expected. The bank also raised the growth forecast for the
year. The rates decision came shortly after a government report raised the
growth estimate of the year.
On Wednesday, the US released
inflation numbers. The numbers showed that the headline CPI rose by 1.8% in
May, which was lower than the expected 1.9%. In April, the CPI had risen by
2.0%. The core CPI< which strips the volatile food and energy products rose
by an annualized rate of 2.0%, which was below the expected 2.1%. On a MoM
basis, the core CPI rose by 0.1%, lower than the expected 0.2%. Later today,
the US will release the retail sales data for May.
This week, the United States
Department of Agriculture (USDA) released the World Agriculture Supply and
Demand Estimates (WASDE). This is an important report that is released every
month to provide guidance to policymakers, farmers, and investors on the
expected demand and supply dynamics of agricultural products. On corn, the
report showed that the US will see lower corn produces as most of the farmers
have not yet planted because of the extreme weather.
Another main thing that happened
was in the corporate scene. On Sunday, United Technologies confirmed an earlier
report that it was merging with Raytheon Technologies. Bill Ackman, a major
investor in United Technologies rejected the deal. As the consolidation wave
continued, Salesforce announced that it was acquiring data visualization
The post Weekly Review: Middle East Tensions Rise as the Trade War Continues appeared first on Forex.Info.