Happy Easter!
Good Tradind!! Green Pips!!
Worries on geopolitical tensions and US policies were the two main forces driving the markets in a holiday shortened week. Yen surged broadly and the relative strength to Swiss Franc argues that worries are mainly on the tensions in Korean Peninsula. The rally in Yen was also accompanied safe haven flows into US treasuries. Long term yields tumbled sharply to the lowest level this year, breaking key near term support levels. Gold surged to as high as 1290.7 and is having its sight on 1300 handle. WTI crude oil also extended recent rise before losing some momentum ahead of 55.24 resistance. In the currency markets, Dollar ended as the weakest major currency as talked down by US President Donald Trump, and dragged down by falling yields. Euro ended as the second weakest ahead of French presidential election and dragged down the Swiss Franc.
North Korean tensions escalated as Trump and Kim showed muscles
Both factors driving the markets were related to Trump. Trump sent a "very power Armada" to Korean peninsula after tweeting that US will solve the North Korea problem alone if China doesn't help. North Korea responded by warning to take "the toughest counteraction against the provocateurs" and to "sweep the imperialist group with a nuclear fire of justice." On Saturday, North Korean leader Kim Jong Un oversaw a military parade, live broadcast to the world. The parade displayed the country's weapons including submarine launched ballistic missiles for the first time. Japan National Security Council has already discussed plan to evacuate as many as 57,000 Japanese residing in South Korea in case of crisis. China urged all parties to "stop provoking" and warned that no one would become a winner in wars.
US-Russian relationship not getting better neither
Separately, Trump ordered to drop US's most powerful non-nuclear bomb, the "Mother of All Bombs" in Afghanistan, targeting ISIS. According to an Afghan official, at least 94 ISIS fighters were killed. Also, three underground tunnels were destroyed. And both US and Afghan officials claimed that no civilians were hurt. Russian government claimed that it has a "big daddy" bomb that is four times the size of the American mother of all bombs. Russian President Vladimir Putin complained that the level of trust with US has dropped after Trump became President of US. Putin criticized that US's missile strike on Syrian air base as "a clear violation of international law". And the chemical weapon attack last week were "provocations" by terrorists and for accusing the Syrian government.
Trump talked down Dollar
Separately, in an interview with the Wall Street Journal, Trump complained that US dollar "is getting too strong, and partially that's my fault because people have confidence in me. But that's hurting - that will hurt ultimately". He added that "it's very, very hard to compete when you have a strong dollar and other countries are devaluing their currency". Meanwhile, Trump also reversed his position and said that China is "not currency manipulators". And he hailed that Chinese President Xi Jinping "wants to help us with North Korea." Also, Trump showed in the interview his "respect" for Fed chair Janet Yellen and suggested that he has not decided whether he would reappoint her for the second term.
Markets losing confidence on Trump
The comments regarding Dollar was seen as a factor driving the greenback down. However, it remains to be seen if investors' worries are more than that. To be specific, traders could be getting increasingly doubtful on what Trump would and could do. His failure in health act and travel ban raised a lot of questions on his administrative ability. Now that his stance on China has had a U-turn. His stance on Fed chair Yellen also changed. He stance on war also changed. And that further raises questions on whether he will deliver his election promises.
Good Tradind!! Green Pips!!
Worries on geopolitical tensions and US policies were the two main forces driving the markets in a holiday shortened week. Yen surged broadly and the relative strength to Swiss Franc argues that worries are mainly on the tensions in Korean Peninsula. The rally in Yen was also accompanied safe haven flows into US treasuries. Long term yields tumbled sharply to the lowest level this year, breaking key near term support levels. Gold surged to as high as 1290.7 and is having its sight on 1300 handle. WTI crude oil also extended recent rise before losing some momentum ahead of 55.24 resistance. In the currency markets, Dollar ended as the weakest major currency as talked down by US President Donald Trump, and dragged down by falling yields. Euro ended as the second weakest ahead of French presidential election and dragged down the Swiss Franc.
North Korean tensions escalated as Trump and Kim showed muscles
Both factors driving the markets were related to Trump. Trump sent a "very power Armada" to Korean peninsula after tweeting that US will solve the North Korea problem alone if China doesn't help. North Korea responded by warning to take "the toughest counteraction against the provocateurs" and to "sweep the imperialist group with a nuclear fire of justice." On Saturday, North Korean leader Kim Jong Un oversaw a military parade, live broadcast to the world. The parade displayed the country's weapons including submarine launched ballistic missiles for the first time. Japan National Security Council has already discussed plan to evacuate as many as 57,000 Japanese residing in South Korea in case of crisis. China urged all parties to "stop provoking" and warned that no one would become a winner in wars.
US-Russian relationship not getting better neither
Separately, Trump ordered to drop US's most powerful non-nuclear bomb, the "Mother of All Bombs" in Afghanistan, targeting ISIS. According to an Afghan official, at least 94 ISIS fighters were killed. Also, three underground tunnels were destroyed. And both US and Afghan officials claimed that no civilians were hurt. Russian government claimed that it has a "big daddy" bomb that is four times the size of the American mother of all bombs. Russian President Vladimir Putin complained that the level of trust with US has dropped after Trump became President of US. Putin criticized that US's missile strike on Syrian air base as "a clear violation of international law". And the chemical weapon attack last week were "provocations" by terrorists and for accusing the Syrian government.
Trump talked down Dollar
Separately, in an interview with the Wall Street Journal, Trump complained that US dollar "is getting too strong, and partially that's my fault because people have confidence in me. But that's hurting - that will hurt ultimately". He added that "it's very, very hard to compete when you have a strong dollar and other countries are devaluing their currency". Meanwhile, Trump also reversed his position and said that China is "not currency manipulators". And he hailed that Chinese President Xi Jinping "wants to help us with North Korea." Also, Trump showed in the interview his "respect" for Fed chair Janet Yellen and suggested that he has not decided whether he would reappoint her for the second term.
Markets losing confidence on Trump
The comments regarding Dollar was seen as a factor driving the greenback down. However, it remains to be seen if investors' worries are more than that. To be specific, traders could be getting increasingly doubtful on what Trump would and could do. His failure in health act and travel ban raised a lot of questions on his administrative ability. Now that his stance on China has had a U-turn. His stance on Fed chair Yellen also changed. He stance on war also changed. And that further raises questions on whether he will deliver his election promises.
