Demand for Risky Assets Has Declined. The Bank of Canada Meeting Is in the Spotlight

Yesterday, the US dollar strengthened against a basket of major currencies. The dollar index (#DX) closed in the positive zone (+0.37%). Demand for risky assets has declined as investors remain cautious due to trade conflict and uncertain growth prospects for the global economy. The financial market participants are still focused on the trade conflict between the United States and China. On Monday, US President Donald Trump said that Washington was not ready to make a deal with Beijing. At the same time, Trump demanded from the Prime Minister of Japan, Shinzo Abe, to stabilize the trade imbalance between their countries.

Optimistic economic data also supported the US currency. CB consumer confidence index was published yesterday, which counted to 134.1 in May and turned out to be higher than the forecasted value of 130.1. Today, investors will be focused on the Bank of Canada interest rate decision. It is expected that the regulator will keep the key marks of monetary policy at the same level. We recommend paying attention to the comments by the Central Bank representatives.

British Prime Minister Theresa May will resign on June 7. The election of a new leader of the Conservative Party will begin next week. Experts believe that Boris Johnson, the leader of the campaign for the Brexit in a referendum in 2016, has the highest chances to become Prime Minister.

The "black gold" prices have been declining. At the moment, futures for the WTI crude oil are testing $58.50 per barrel.

Market Indicators

Yesterday, the main US stock indices closed in the negative zone: #SPY (-0.93%), #DIA (-1.03%), #QQQ (-0.38%).

The 10-year US government bonds yield continues to decline. At the moment, the indicator is at the level of 2.23-2.24%.

- Report on the labor market in Germany at 10:55 (GMT+3:00);
- Bank of Canada interest rate decision at 17:00 (GMT+3:00).

by JustMarkets, 2019.05.29

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.