Trade deadlock, Saudi tanker attacked, expert opinions

14 may 2019

The trade negotiations between the US and China are still at an impasse. The reason is - the Trump’s position, who accused China of violating the agreements. China, in turn, accused the United States of having provoked a negotiation crisis. Well, sum up there is a complete halt in the negotiation process, the expected counter-actions on the part of China and rather gloomy prospects for the world economy ahead.

As for counter-action. China announced that it will increase duties on US goods in the amount of $ 60 billion. The Ministry of Finance of the People’s Republic of China issued a statement announcing that from June 1, 2019 duties on a number of American goods will be increased from 5% to 25 %

Yuan naturally has dropped, reaching the lowest values against the dollar since December 27. According to analysts, this decline will not be limited and it is worth preparing for the assault on the mark of 7 yuan per dollar (the minimum value of the yuan since the global financial crisis). Yuan was not the only victim - stock indices declined steadily.

In general, the conditions for Japanese yen and gold growth are more than favorable. So, we continue to recommend its buying.

As for the US dollar, recently, any uncertainty of investors leads to its growth: the markets perceive the dollar as another variation of safe-haven assets. That is why a lot of managers of famous funds unanimously declare that the dollar is still the king in the foreign exchange market and its buying should be preferred. Moreover, the advice is buying it against the currencies of developing countries, for example, the Turkish lira, the Argentine peso, and the same Chinese yuan. It is simply to understand what is happening currently, the escalation of trade wars causes damage primarily to the economy of developing countries, therefore its currencies will be the first to take the brunt.

Saudi tankers among 'sabotaged' ships off the UAE coast. Taking into account the already tense situation in the Middle East, the oil market reacted to this force majeure as a completely natural reaction in the form of price increases and oil. But the growth did not last long and the day closed with a “black candle”. We will keep up to date and continue to look for points for oil sales.

By the end of Monday, our trading preferences have changed: we will look for points for buying the euro against the dollar, selling oil and the Russian ruble, as well as buying gold and the Japanese yen, but we will wait a little with Australian and Canadian dollars buying so far.