Global Stocks Mostly Higher; US Dollar, Oil and Italy in Focus

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Updated: May 22, 2018, 12:47 UTC

The USD weakened further overnight after the movement began in the US trading session yesterday. The Macro background is mixed with tensioning increasing around Iran but positive tones coming from US/China negotiations and US/North Korean talks going ahead as planned.

The Italian Election has delivered a Coalition Government that “will put Italian national interests first”. This is creating a tension with the EU as the new government has proposed billions of euro in tax cuts, increased social welfare payments and scrapping pension reform, all of which would break the fiscal discipline rules of the EU.

The FTSE MIB is trading higher today after falling to the April lows yesterday around 23083.00. Global Stocks edge higher on Tuesday morning as investors embrace US-China ‘hold-on’ status.

Chicago Fed National Activity Index (Apr) was 0.34 against an expected 0.14. This shows a healthy economy with the 2018 average at a higher level than previous years.

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FOMC Member Bostic said that inflation was likely to run a bit above 2% for a while and that the US is close to or at full employment but wage growth is tepid. Higher interest rates would also allow the Fed to counter an economic downturn in the years ahead. Slow wage growth slows the pace of hikes for the Fed.

FOMC Member Kashkari spoke yesterday saying that he feels that there might still be some slack in the labor market and wages have not picked up. He said that he wanted to allow the economy to continue to strengthen. He said that he is closely watching the yield curve for signs the economy might falter. If the yield curve flattens the spread between short and long-term bonds decreases, meaning short-term bonds are less risky and more attractive than long-term bonds.EURUSD is down -0.06% overnight, trading around 1.17841.

USDJPY is down -0.12% in the early session, trading at around 111.09
GBPUSD is up 0.06% this morning trading around 1.3456.
USDCAD is down -0.10% overnight, trading around 1.2759
Gold is down -0.16% in early morning trading at around $1,290.20
WTI is down -0.14% this morning, trading around $72.67

This article was written by FxPro

About the Author

Ed Andersoncontributor

Ed Anderson has over 35 years of experience in the financial markets, having worked in London, New York, Toronto, Singapore and Australia. Ed provides in-depth Fundamental and Technical Analysis, as well as frequent market insights on multiple asset classes, to the benefit of FxPro clients.