Asian shares stepped back from a 2-1/2 month high as risk appetite soured on bets that Europe’s massive monetary stimulus was nearing an end, compounded by uncertainty over trade relations ahead of a key meeting of global leaders.
In currencies, the dollar has come under pressure this week as the euro bounced back from 10-month lows thanks to an ebb in Italian political concerns and speculation that an ECB could signal intentions to start unwinding its big stimulus program when it holds a policy meeting on June 14. The euro was effectively unchanged at $1.1796 after rising to a three-week high of $1.1840 overnight. It was up more than 1 percent on the week and was set to post its biggest weekly gain since mid-February.
In Commodities Gold is under pressure since another rate hike might take place when the U.S. Federal Reserve meets next week. With solid economic news continuing to come out of the U.S., the Fed is able to take an aggressive stance to tighten monetary policy and stay ahead of inflation. The U.S. reported a string of bullish economic data last week including nonfarm payrolls and the unemployment rate for May, boosting investors’ confidence in the U.S. economy. Higher interest rates generally weigh on gold, because they make it more expensive to hold non-yielding assets.
Oil prices were boosted by worries over a steep drop in exports from crisis-plagued Venezuela, which faces the threat of U.S. sanctions. U.S. crude rose 13 cents to $66.08 a barrel, while Brent added 1 cent to $77.33.
For today important economic releases include the Canadian Employment Change and Unemployment Rate and of course the G7 meeting in Canada, where finance ministers from the group of seven industrialized nations such as United States, Japan, Germany, France, United Kingdom, Italy and Canada will discuss economic policy with special mention on tariffs and potential trade wars is among the key economic events for today.