Opening Bell: Gold Shines; Oil Tumbles; USD Slips; U.S. Futures Waver


  • New threat of US tariffs on auto imports spurs global auto shares selloff

  • European miners and oil stocks outperform, even against continuing oil prices decline

  • US stocks boosted by dovish Fed minutes; futures mixed amid renewed geopolitical risk

  • Dollar takes a hit, boosting gold and yen upward move

Key Events

Global stock indices were seen struggling to gain traction on Thursday, amid renewed global headwinds that included fresh plans by US President Donald Trump to impose hefty tariffs on automakers imports.

US futures for the , , were mixed, hovering around neutral levels in the early European session.

Automakers took a hit in Europe after Trump dealt global markets a new trade blow by ordering the US Commerce Department to examine the possibility of imposing tariffs of up to 25 percent on vehicle and car-parts imports.

German automakers BMW (OTC:), Daimler (OTC:) and Volkswagen (OTC:) plunged around 2 percent on the news.

However, miners and oil stocks offset slumps in automakers shares, even as and futures kept edging lower, the former on track for a third consecutive negative session today. This helped eke out a 0.1 percent gain. However, the pan-European benchmark index is still more than one percent below the three and a half month peak it posted on Tuesday, as it suffers downward pressure from both Italy’s political headwinds (and in particular, from the country’s new government coalition spending plans) and ongoing global trade jitters.

Stocks in Asia also slipped lower, led by downbeat Japanese stocks, which took the brunt of Trump’s latest trade tariff move.

TOPIX Daily Chart

TOPIX Daily Chart

The tumbled 1.2 percent after Trump’s announcement pushed automakers shares lower, bringing the Japanese benchmark index’s four-day declines to a total of 2.15 percent. Re-ignited trade headwinds prompted a further spike in the —creating an additional hurdle for Japanese stocks. Technically, the TOPIX extended a decline after crossing below an uptrend line since March 26 on Wednesday—thereby signaling a reversal.

Chinese shares on the slid 0.4 percent, to a two-day 1.9 percent decline, following an impactful hanging man formation on Tuesday. Shares on Hong Kong’s instead managed to climb 0.4 percent.

South Korea’s slid 0.25 percent on Thursday, as investors finally caught up with heightened geopolitical risk after they had managed to focus squarely on corporate performance on Wednesday, when they shrugged off mounting indications that the June 12 meeting between the US with North Korea may not take place.

Global Financial Affairs

The never-ending twists seen across global stock markets this year are somewhat rebalancing the upbeat ride equity investors and traders enjoyed last year, when they simply had to remain invested and watch prices surge, supported by historically low levels of .

Yesterday, US stocks bounced back from a loss in the last two hours of the session, after from the Fed’s May monetary policy meeting revealed policymakers are not seeking to speed up the pace of tightening.

Yields on Treasurys closed below the 3 percent psychological level, but are bouncing back above that key mark today after sliding lower in the early session and therefore forming an intraday hammer.

S&P 500 Daily Chart

S&P 500 Daily Chart

The ticked 0.32 percent higher on Wednesday. However, it was defensive sector to lead the gains (+0.91 percent), which underscores a lingering risk-off sentiment. shares took the hardest hit from a reduced outlook for interest rate hikes, losing 0.64 percent. and , down 0.23 percent and 0.12 percent respectively, took a beating from reignited trade headwinds.

Tired of the geopolitical roller-coaster sparked by ongoing trade disputes and diplomatic glitches over North Korea and Iran, global investors took shelter in , bonds and, naturally, the safety of the yen.

XAU/USD Daily Chart

XAU/USD Daily Chart

Gold is gaining ground for a third day, within a return move to retest the integrity of the double top pattern. It’s worth noting that the yellow metal inched higher yesterday despite a strengthening . The dollar, in turn, managed to close higher even after FOMC minutes revealed a dovish slant .

USD/JPY 60-Min Chart

USD/JPY 60-Min Chart

Meanwhile, the yen benefited from the global flight to safety, the dollar’s intraday weakness and Japanese investors’ rotation out of their Turkish exposures.

Up Ahead

Market Moves

Stocks

  • Canada’s rose 0.04 percent at the close Wednesday.

  • The STOXX Europe 600 gained 0.1 percent.

  • Futures on the S&P 500 Index dipped less than 0.05 percent.

  • The UK’s advanced 0.1 percent.

  • Germany’s dropped 0.1 percent to the lowest level in more than two weeks.

  • The climbed 0.3 percent.

  • The slid 0.2 percent to the lowest level in more than two weeks.

Currencies

  • The Canadian is down 0.30 per cent early Thursday against the U.S. greenback, trading at 0.7763.

  • The Dollar Index fell 0.15 percent and is trading at the bottom of the day.

  • The increased 0.2 percent to $1.1719, the biggest climb in almost two weeks.

  • The advanced 0.1 percent to $1.3359, the largest gain in a week.

  • The Japanese yen climbed 0.5 percent to 109.57 per dollar, the strongest level in almost two weeks.

  • The decreased 2.4 percent to 4.691 per dollar, the weakest level on record with the largest tumble in more than seven months.

Bonds

  • Canada’s was up slightly early Thursday at 2.453, a 0.41-percent increase.

  • The yield on 10-year Treasuries gained one basis point to 3.00 percent, the biggest gain in a week.

  • Germany’s yield advanced one basis point to 0.51 percent.

  • Britain’s yield increased less than one basis point to 1.44 percent.

  • Italy’s yield decreased three basis points to 2.367 percent.

Commodities

  • West Texas Intermediate crude declined 0.4 percent to $71.57 a barrel.

  • Gold climbed 0.2 percent to $1,296.57 an ounce, the highest in more than a week on the largest increase in two weeks.

  • Brent crude fell 0.4 percent to $79.46 a barrel.



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