Summary:

  • European economy maintains a decent pace of the economic growth

  • Asian and European stocks fell under pressure following Gary Cohn resignation

  • Cryptocurrencies are posting declines across the bloc

Resignation of the Donald Trump’s top economic advisor hit stock markets in Europe and Asia with a wave of selling. However, the losses in Europe have been partially erased. Japanese yen is once again the strongest currency in the G10 while Swedish krone underperforms against its major peers. Investors await BoC decision with CAD being the second weakest currency in the Group-of-10. Gold trades lower as USD strengthened. Oil posts severe declines ahead of the DOE report release.

The European economy expanded at the decent pace in the last quarter of the past year matching the initial estimates. Net exports added the most in a year-over-year increase showing their largest contribution since the third quarter of 2012. The release seems to highlight importance of trade in the global economy at a time when US President Donald Trump talks about tariffs.

This week is much about the trade wars talk but traders will surely pay attention to the key calendar events that are still ahead of us: the ECB meeting and the NFP report. We analyze these events and take a look at relevant markets: EURUSD and US500.

Along with soured moods seen across global equities cryptocurrencies were afflicted as well. In early trading all major virtual coins such as Bitcoin, Ripple, Litecoin, Ethereum or Dash are losing steam while some of them have already achieved decent technical levels which could serve as a tipping point in the short-term.

Ones that think the new Italian government will see daylight anytime soon may find themselves disappointed. Since 1992  Italian elections it took 51 days on average to form a government thus we may have to wait weeks not days for the new cabinet. This period may be even longer if we take into account discrepancies between two parties that have won most votes on Sunday.

The US dollar slid, Treasuries gained a foothold while the Canadian dollar extended its decline when Gary Cohn, Trump’s top economic advisor, announced yesterday that he would step down. The prime reason is obviously a dispute with Donald Trump with regard to tariffs on steel and aluminium.

Wednesday’s main market event is unquestionably Bank of Canada interest rate decision therefore one may expect increased volatility on the CAD tied FX pairs in the afternoon. Moreover, ADP report on the US labour market will be also released while oil traders will stay cautious ahead of the DOE report after API signalled a major build in oil stockpiles.