U.S. indices are weaker in early trading this morning after U.S. President Trump announced an additional 5% tariff an all goods from Mexico effective June 10. Fed’s Clarida implied yesterday that a rate cut was an option, depending on economic developments. China’s PMI numbers for May are due today.
US30USD Daily Chart
Source: OANDA fxTrade
- The US30 index snapped a two-day losing streak yesterday but has seen further weakness in early trading this morning after Trump announced more tariffs on Mexican imports. The index is facing its worst down-month in five months.
- The index is falling toward the 38.2% Fibonacci retracement of the December to May rally at 24,668
- U.S. core personal consumption expenditure price index is seen steady at 1.5% in April, the latest survey of economists shows. A lower figure could spark speculation that the Fed may adopt a rate-cutting bias.
DE30EUR Daily Chart
Source: OANDA fxTrade
- The Germany30 index has fallen to a near two-month low in early trading this morning, echoing the move seen in U.S. indices
- The index is dropping toward the 100-day moving average at 11,640, which has supported prices since February 19
- Germany’s retail sales are expected to rise 0.1% m/m in April after a 0.2% decline in March. CPI is expected to fall to +1.6% y/y in May from +2.0% last month.
CN50USD Daily Chart
Source: OANDA fxTrade
- The China50 index fell for the first time in five days yesterday and, given Trump’s latest move on the tariff front (even though it was with Mexico), could feel further pressure today
- The index is holding above the 100-day moving average at 12,544, as it has done on a closing basis since January 23
- China’s manufacturing PMI is seen dropping below the 50 contraction/expansion threshold again in May, which would be the fourth time in six months. Expectations are fro a drop to 49.9 from 50.1, but a worse reading could pile additional pressure on Chinese stocks.