The month of June has some serious work to do, recover from the brutal losses of the previous month. Safe haven is the name of the trade as China retaliated with tariff hikes on US goods on Saturday.
Treasury yields have tumbled and gold price has gone through the roof, thanks to the on going trade war between the two biggest economies of the world. Traders pushed the price of gold higher, surpassing the critical level of 1300 on Friday, as many investors see a higher chance of recession taking place if both countries do not change their stubborn behaviour.
Well, Beijing has always welcomed the idea of drawing the line under this on the basis of mutual respect. However, the Trump administration is determined to do whatever it takes to bully its way in, and so far, China has made it clear; Mr Trump has picked up a fight with a wrong country.
Nonetheless, the appetite for riskier assets have really waned among investors and the heavy sell off which we experienced on Friday is back on track.
US futures and European markets are trading lower as investors factor in the full force of the trade war storm. Mr Trump has also added India to his tariff list, it seems like this storm is going to destroy all the relationships which the previous administrations built.
Back in Europe, another storm is brewing, Donald Trump will be visiting the UK. The fear is that he is going to create more divide among the law makers and this is the last thing which Britain need. The fact is that why we need to care about who Mr Trump supports, the UK’s future should not be architecture by someone like him. The country’s law maker should understand this and they should not be afraid of him. They must stop him trying to divide the country.
Despite all of this, it is wise to keep an eye on Sterling’s volatility, we are expecting higher volatility for the currency this week. Business owners do not want to leave Europe without any deal. Well most of them are actually hopeful that perhaps another meaningful referendum will be able to save the UK from this Brexit chaos.
To conclude, candidates for the British prime minister positions are busy in fine tuning their Brexit plans and this is going to keep the traders on the edge this week.
