Donald Trump Sends Negative Message to Investors

US stocks were affected by the Republican presidential front-runner Donald Trump’s comments as he predicted a 'very massive recession' in the U.S.,  investors began to ask, are the ex-indicators representative of the state of the US economy or is it exaggerated?

USD index declined to 94.39, before paring its losses.

Euro gained little vs. USD and traded at $1.14, positively affected by the Euro economic sentiment indicator for April. Settling above $1.1370 is a positive indicator as it may open the door for the pair to experience further rises. However, the ECB don’t anticipate any further rises. 

The pound climbed against the U.S. dollar, boosted by the release of strong UK construction data. GBP jumped to $1.43 but it did not last long amid uncertainty surrounding the UK referendum on EU membership and fears of a 'Brexit'.

JPY extended its gains against USD to trade at 111 levels, thanks to soft USD data and a trend in liquidity, which moved towards safe haven assets. Yen rose vs. USD despite the BOJ cutting interest rates to become negative. Such action gave an idea that the BOJ lost its control over the yen's rally and the pair could re-test 110 levels once again.

Gold prices declined during yesterday’s trading session, negatively affected by the decline in demand for gold as a safe haven assets. The yellow metal traded at $1,215 at the end of Monday’s trading session and the precious metal could re-test the resistance levels of $1,208 and $1,200 this week.

On Monday, oil prices declined as a supply meeting begins to look pointless. The current situation becomes irretrievable after Saudi Arabia, the world's biggest oil producer, said it would not freeze its oil output unless Iran do the same.

The most important economic events:

  • USD ISM Non-Manufacturing/Services Composite (MAR): (GMT 16:00) – Important – Forecast (54.1) – Previous (53.4).
  • GBP Markit/CIPS UK Services PMI (MAR): (GMT 10:30) – Medium – Forecast (53.5) – Previous (52.7).
  • GBP Markit/CIPS UK Composite PMI (MAR): (GMT 10:30) – Medium – Forecast (53.4) – Previous (52.8).

The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.

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