Summary:

• Trump calls of N.Korean summit; Gold breaks back above 1300
• DE30 falls to its lowest level of the week with automakers leading the declines
•  ECB minutes see no major developments; Euro edging higher
• GBPUSD looks to recover as retail sales bounce back
• Lira reverses surge despite emergency hike

It’s been another busy day in the markets with several major moves and many trading opportunities. One of the clearest came this afternoon when US president Trump cancelled his highly anticipated meeting with N.Korean leader Kim Jong Un in Singapore next month. This caused an immediate reaction with Gold spiking higher and reclaiming the 1300 level while stock took a hit as the US500 fell to its lowest level of the day and not far from recent lows around 2700.

The news weighed on equities this side of the Atlantic too, with the DE30 and UK100 extending their earlier declines. The DE30 was under pressure from the off with automakers such as BMW, Daimler and Volkswagen all opening sharply lower on another Trump-related story – this time the threat of imposing a 25% import tariff on cars to the US.

 The Euro looks set to post a day of gains, with the single currency rising against most of its peers. The single currency has been under pressure so far this week with yesterday’s PMIs suggesting that the slowdown in economic activity throughout the bloc that has been evident in recent months is more than just a cooling off after a stellar 2017. The ECB minutes are normally not that market moving (with the January release a notable exception), and while we have seen the Euro rise since their release, the move doesn’t appear to be a large reaction to their contents.

The GBPUSD has been in a near constant state of decline these past few weeks as the BoE performed a pretty dramatic U-turn on a May hike and rising US yields boosted the buck. Cable fell to its lowest level of 2018 during Wednesday’s session, and flirted with printing a 1.32 handle with the low seen at 1.3304. However, there have been a couple developments since the low that could sow the seeds of a recovery, with first the FOMC minutes showing a possible dovish shift before this morning saw a strong bounce back in UK retail sales. 

Trading the Turkish Lira hasn’t been for the faint of heart in recent days with some large moves and wild swings. The Central bank of Turkey decided on Wednesday to increase the late liquidity window lending rate by 300 basis points to 16.5%, the largest move since the beginning of 2009. This saw the currency bounce back with USDTRY and EURTRY both dropping sharply lower yesterday evening, although the move has been fairly short lived with buyers stepping in and sending both firmly higher today; USDTRY (+4.2%) and EURTRY (+4.32%)