The US stock markets catapulted to a new record high on Thursday as investors continued to sidestep fears over the escalating global trade war and instead focused on a boomy American economy. And at least for today anyway, US-China trade war was yesterday’s news. Make no mistake the US economy is running on all cylinders, robust growth, soaring employment and rising capital investments. Suggesting the healthy US economy is more than just a short-term knock-on effect from the intravenous elixir of easy credit and fiscal glucose. The US economy is thriving. Meanwhile, six months into the U.S. tariffs on imported aluminum and steel, Caterpillar Inc is finding that one of the best ways it can protect profits is a cost cutting strategy that is more than two years old.
The EUR/USD was toying with the market all week, and finally, the dollar bears got the bravado to take on the 1.1730 level which predictably triggered a cascading effect to 1.1780. Regarding GBP/USD, heads into today’s London market open sitting just below recent swing highs, with Thursday’s peak of 1.3298 sitting close by. Limited data for Friday will see continued focus given to Brexit talks, which see cold water beginning to splash on hopes for a peaceable workaround. Trump called on the OPEC to lower prices, saying on Twitter “they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices.”
In commodities, Gold is quiet while modestly reacting to the weaker dollar but surging US Bond yields are holding back speculators and not to mention there’s nary a hedger insight with US equity markets rising above all-time high-water marks. Regarding Oil, prices were mixed today after falling in the previous session as U.S. President Donald Trump urged OPEC to lower crude prices ahead of its meeting in Algeria this weekend.
For today the main economic calendar activities is the Canadian CPI m/m and Core Retail Sales m/m.