The U.S. Dollar is trading in favorable ranges all across the board with markets on risk-off mode as all eyes are on the potential for armed conflict in Iran as the globe looks for the U.S to negotiate a deal that could prevent it.
Geopolitics are indeed all over the headlines with articles over the weekend also digesting the annual Munich security conference as European leaders seemed to breathe a little easier following some reassurance and friendlier tone from U.S. State Secretary Marco Rubio. Nevertheless, the main concern is over escalation in the Middle East as the Strait of Hormuz is being partially blocked for Iranian military exercises.
Sentiment is dampened in equities, something that could continue into today as traders return from a holiday in the U.S. Movement in oil markets is a bit muted at the moment while metals such as gold keep on declining in price. Silver tumbled by over 2.0% while non-traditional assets like Bitcoin also experienced a 1.1% drop.
On the domestic front, it makes sense for the Buck to be climbing against its peers as labor numbers from January keep on impressing after ADP Weekly Employment Change figures impressed as the end of last month witnessed a big increase in payrolls. Fed chances of cutting at least once stand at 52.0% for the June 17th meeting, meaning likelihood of lower borrowing costs down the line is diminishing. Housing gauges and FOMC Minutes will be released in the next couple of days with Friday being the biggest day for data points with everything from inflation to Purchasing Managers Indicators out after a delay caused by a partial U.S. government shutdown.
What to Watch This Week…
- U.S. Durable Goods Orders December out Wednesday 8:30AM
- U.S. GDP & Core Personal Consumption Expenditures, Friday 8:30AM
- Monex USA Online is always open
EUR ⇓
The Euro fell to a two-week low, calming its rise after advancing to its highest point in four and a half years at the end of January. European leadership has been on the edge this year as they assess security challenges and try to form a more united front towards defense. Diplomacy has improved since the gathering of world figures at Davos, but fear remains that the relationship with the U.S. needs a reset on some fronts. Russia claims that it can force Ukraine to negotiate after four years of battling that have fragmented Ukraine physically and politically. Those concerns along with contractions in some economic indicators across EU-member nations have the shared currency on the downside. German ZEW Expectations Survey results for February were way more negative and pessimistic than expected, aiding in lowering the mood overall for the Euro-zone aggregate reading as well.
