There is a mixed start to the European session, with investors taking more cautious moves ahead of the meeting between Xi and Trump. The G-20 summit begins tomorrow, expecting the two presidents to meet on 29. Earlier today, news has emerged that the two countries have reached a temporary ceasefire, with which the imposition of new tariffs is delaying. However, the main expectations were those that market participants are not convinced that we will eventually have any deal. The question is for the two sides to agree to restart the talks, burying the Tomawks, at least temporarily.
Asian markets ended up predominantly with growth, and European futures are indicating a strong start, but only the French CAC40 is lagging behind. However, with the beginning of the session, everything can change, and today expect the information noise to be serious around the G-20 meeting and the presidents.
From the point of view of economic data, today we have only Germany’s CPI for Europe. Inflation data will shed more light on where inflation is moving in the country and how much this would affect overall inflation for the euro area. Here, as in the United States, this indicator is closely monitored, with both central banks having a goal, and their policies are actually revolving around inflation and expectations of where it will be month by month.
In the energy and raw materials markets we expect oil to continue to rise today. The smaller oil inventory yesterday, the tensions in the Middle East and the forthcoming OPEC meeting in Vienna on July 1 and 2 further support the price. With gold, we expect it to continue with its correction in view of the risk-sentiment about the expectations for the development of the meeting between Xi and Trump.
At the FX markets today, we expect the US dollar to consolidate its position as a dominant asset, and the yen will continue to devalue as much as the past few days.
Trader Martin Nikolov