The US and China Are on the Edge of a Full-Scale Trade War. Investors Expect a Report on the Labor Market in the US

The US currency is under pressure due to the trade conflict between the US and China. Today, the United States have imposed additional duties on Chinese goods and have informed that if Beijing does not make concessions, they will impose tariffs on $500 billion worth of Chinese goods. China, in turn, is not going to give in. Investors are afraid that such actions will lead to negative consequences on the financial markets and will affect the supply of goods around the world. The US dollar index (#DX) closed in the negative zone (-0.30%) yesterday.

According to the FOMC protocols, which were published yesterday, the Fed representatives support a further increase in interest rates, as economic indicators continue to grow. However, officials were also concerned about trade tension. In the light of new events, it is difficult to say whether interest rates will be raised in September. We recommend following up-to-date news regarding the trade war between the US and China.

Today, a report on the labor market in the United States will be in the focus of investors’ attention. Preliminary statistics from ADP turned out to be rather weak. We recommend paying attention to the difference between actual and forecasted values.

The "black gold" prices are moderately increasing after a decline the day before. At the moment, futures for the WTI crude oil are testing a mark of $73.00 per barrel.

Market Indicators

Yesterday, the major US stock indices closed in the positive zone: #SPY (+0.82%), #DIA (+0.78%), #QQQ (+1.24%).

At the moment, the 10-year US government bonds yield is at the level of 2.83-2.84%.

- Reports on the US labor market at 15:30 (GMT+3:00);
- Statistics on the labor market of Canada at 15:30 (GMT+3:00);
- The index of economic activity in Canada from Ivey at 17:00 (GMT+3:00).

by JMarkets, 2018.07.06

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.