China’s President plans to open up the Chinese economy – the Ruble is getting slammed.
The start of the week was slow as expected and with a lack of fresh data the focus was mainly on the geopolitical arena. The economic calendar is relatively empty today and the only piece of news worth keeping an eye on is the US PPI. The report is expected to print slightly softer this month but the focus will be on Wednesday’s FOMC meeting minutes and Draghi’s speech.
The Russian ruble is getting slammed. The ruble trades down 2.5% at 59.5670 per dollar as sanctions announced Friday by President Donald Trump continue to weigh and equities dropped following the US sanctions toward Russia, Mr. Trump took a rare swipe at Mr. Putin for his support of President Bashar al-Assad of Syria. Trump wrote on Twitter. “President Putin, Russia and Iran are responsible for backing Animal Assad.”
The commodity currencies are rallying versus the greenback with the Australian, Canadian and New Zealand Dollars all testing last week’s highs with a view to break to the upside. Precious metals also gained on the back of a weaker Dollar while getting support from the geopolitical tensions between US and Russia. Fresh tensions are boosting metals with palladium leading the gains and surging more than 3%.
European Central Bank President Mario Draghi said policy makers are still uncertain about a key driver of inflation even as he expressed confidence in the broad outlook for euro-area economic growth. “We expect the pace of economic expansion to remain strong in 2018” Draghi said in the institution’s annual report published Monday. The Euro gained from 1.2260 towards 1.2325 after the report.
Asia markets rallied when China’s Xi Jinping delivered measured comments on trade and tariffs expressing a willingness to open China’s economy going forward. A lack of combative words from Xi regarding the ongoing US-China tariff spat delivered a boost to market sentiment for Tuesday’s action. The European futures are trending higher looks like a positive start for today’s markets.