IronFX, Daily Report: New US-China trade deal & Turkish lira rebounces
Here are today’s important market events!
This article is originally referred from IronFX News.
Turkish lira hits record low and rebounces
- The Turkish lira dropped more than 5 percent on Wednesday and forced the CBT to hike rates by 300 basis points reaching 16.5%.
- The central bank acted after about three weeks continuous depreciation of the Turkish Lira against the USD.
- Erdogan, who earlier intended to practically take over the country’s monetary policy, pledged allegiance to global principles of monetary policy in a televised address yesterday.
- Analysts consider the 300 bp rate hike as the minimum and expect further rate hikes as consumer inflation accelerates.
- Should there be further headlines about rate hikes from he CBT we could see the Turkish Lira strengthening.
Trump wants a new structure for US-China trade deal
- President Trump said yesterday that any US-China trade deal would require “a different structure”, refuelling uncertainty.
- The statement was made as negotiations are already under way, raising fears about reigniting a trade war.
- The trade talks seem to be clouded by the negotiations for North Korea’s nuclear arsenal, where China is North Korea’s only ally.
- Should there be more headlines about further uncertainty in the US-Sino trade talks we could see safe havens strengthening.
Today’s other economic highlights
- Germany: GDP for Q1, Survey:+0.3% qoq Prior: +0.3% qoq, 06:00 (GMT), could weaken EUR
- GfK Consumer Confidence for June, Survey:10.8 Prior:10.8, 06:00 (GMT), could weaken EUR
- UK: Retail Sales for April, Survey: +0.7% mom, Prior: -1.2% mom, 08:30 (GMT), could support the GBP
- Core Retail Sales for April, Survey: +0.4% mom, Prior: -0.5% mom, 08:30 (GMT), could support GBP
- US: Existing Home Sales for April, Survey: 5.56M Prior: 5.60M, 14:00 (GMT), neutral to bearish for USD
- Speakers : As for speakers, BoE Governor Mark Carney (08:00 GMT and 19:10 GMT), New York Fed president William Dudley (08:15 GMT), ECB’s Peter Praet (10:30 GMT), FOMC member Raphael Bostic (14:35 GMT), Dallas Fed President Kaplan (14:35 GMT and 15:00 GMT) and FOMC member Patrick Harker (18:00 GMT) speak. Also please be advised that ECB’s Account of Monetary meeting minutes will be released (11:30 GMT).
IronFX Daily Report ‘May 24th’
Original Source: IronFX News
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