The global stock markets kept plans to anticipate what would be the meeting of the side bar between President Trump and Xi at the G20 meeting. After the 80-minute meeting, Trump said the negotiations are "underway".
The reference scenario that led to the establishment of the two leaders of the G20 was only the resumption of commercial conversations. Without a great announcement or details on how to approach or move away to reach an agreement, there is a high probability that the result is similar to the previous G20 meeting where another truce was announced.
The fears of a tariff escalation will be facilitated, but current rates could remain unless the two sides really progress.
At his meeting in Osaka, everyone played his role without any additional drama and until more details come out, we return to the first place. The way forward seems complicated, since China demands more egalitarian treatment and the United States is pushing for the protection of intellectual property.
The US dollar is mixed with important couples at the end of the negotiations on Friday. Commodity currencies lead the charge with the New Zealand dollar almost 2% more than the dollar. The Canadian dollar increased by 1 percent while strong economic indicators reduced the likelihood of cutting the interest rate. The Fed cut back the wings of the dollar indicating a reduction in the reference rate.
Petroleum is positioned to increase after the ceasefire between China and the US. OPEC + had a more productive summit of the G20 with the Russian president, Putin, who announced an extension of the production reduction agreement that will end at the end of this week when the group will meet in Vienna.
The markets wait with interest for the first week of July. The Organization of Petroleum Exporting Countries (OPEC) will meet with the main producers to finalize the extension discussed by Putin at the G20.
Manufacturing data in China and the United States will not show any impact on the G20 meeting, but the indicator could change drastically forwards. The Chinese factory's activity was lower than expected by 49.4 and remains in contraction, with the recently announced truce between China and the US that will have to agree or if global manufacturing will continue to offer data points soft
The Reserve Bank of Australia (RBA) could reduce its rate to 1 percent, as the central bank is part of the heart of those responsible for monetary policy that have returned to their ways of relaxing .
The week is completed with the publication of non-agricultural payrolls in the United States (NFP) on Friday. It is expected that US jobs will fall again after the disappointing March report that only showed a profit of 75,000. An interval of 150,000 to 210,000 is expected with a blow of the average of the hours that earn up to 0.3 percent.
OIL – Russia and Saudi Arabia progress to the G20
Oil ended the week mixed with West Texas Intermediate which rose 1 percent, but Brent lost 1.53 percent. The uncertainty of trade before G20 adds volatility to energy prices. It was the main reason why OPEC and the other major producers withdrew the ministerial meeting this week. Russia is still marginalized and it seems that only a large drop in oil prices will accelerate an extension of the agreement to reduce production to stabilize prices.
Crude oil prices have been downgraded, as the trade war between the US and China was a negative factor in energy demand. Breakdowns of supplies added support to prices, but the main factor was OPEC +. That is why, if Russia does not accept an extension, the initiator could be too much for Saudi Arabia to deal with itself.
Although Trump and Xi return to the negotiation table on trade, Russia decided to move forward with an extension of production reduction that could last 9 months.
GOLD – Gold Under Pressure of Trump-Xi's positive comments about trading at the G20
The most anticipated meeting of the G20 left the market participants wanting more. The situation between Trump and Xi was a new round of conversations with no clear date. OPEC +, on the other hand, was more productive and, more or less, announced the expansion of the production agreement. The group had delayed its ministerial meeting and after the ceasefire the US fire decided to continue limiting the production of up to 9 months.
The number rose 0.97 percent on Friday, as the yellow metal was once again the preferred place for investors seeking refuge against uncertainty. The desire to reduce Fed rates is to keep the dollar weak and give the advantage the advantage since it starts in July. The market sets prices at a reduction in the rate that will be announced in the Federal Open Market Committee (FOMC) in July, which will put more downward pressure on the dollar.
Tensions in the Middle East and the debate on Brexit will continue to be targeted in July, which will mean a sharp decline in the rise in revenue as the main central banks reinforce their monetary policy .
Gold will be pushed, as commercial optimism reduces the attractiveness of the yellow metal as a safe haven, although taking into account the winds of macro face is still part of several diversification strategies. The lack of details on what really changed the US-China negotiations makes it difficult to believe that the new talks will have a different result, which is positive for the ###############
The next major obstacle to gold will be the economic indicators of the United States, if there is a significant rise, the Fed could maintain the type of reference at its July meeting. The market has slowed down the number and depth of rate cuts after less demanding comments by Fed members. If there is massive employment and inflation gains in the PFN report, gold could fall as the cut narrative of the rate weakens.
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