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19.06.2018 10:04 AM
Global macro overview for 19/06/2018

The administration of Donald Trump uses increasingly aggressive rhetoric in the shuffles between China and the commercial background. The President of the United States has threatened to impose an additional 10% duties on a new catalog of Chinese products with a total value of USD 200 billion. This move was supposed to be a response to the last charges imposed on the American products by the Chinese government, which are an answer to US protectionism. The spiral of retaliatory actions has revived the whole - the authorities of the Middle Kingdom are announcing that they will not remain indifferent to yesterday's position of the United States.

The exchange of threats that takes place between the two superpowers obviously has a negative impact on global markets:

  • A panic sale in post-holiday trade on Chinese exchanges. Shanghai Composite drops almost 4.0%, Hang Seng has fallen 3.0%. The Shenzen Composite sell-off is even deeper.
  • The contract for DAX drops by 1.7% and it is at 12600. The test of the support zone from May and June begins.
  • Futures on the SP500 also decrease by around 1.5% and he already wiped out half of the May rebound. Currently, the market is under 2750 points.
  • USD/JPY falls below 110 and has a movement of 0.7 percent. The Australian dollar is heavily overestimated, AUD/USD is falling 0.8 percent, its May breaks through the year and is the lowest for a year.
  • Commodities are under enormous pressure, cotton is particularly weak, which in the week was cheaper by more than 10 percent. About 2.0% overestimated are not only contracts for this raw material, but also soy and corn. Gold has only a minimal increase (0.25%). The ounce is valued at USD 1281.3.
  • USA10Y debt yield decreases by 5 bp and to 2.86%.

The global investors should keep an eye on the opening of the Wall Street as this might be one of this days, when the markets will react very violate. Let's now take a look at the SP500 technical picture at the H4 timeframe before the market opens. The market remains in a tight consolidation zone between the levels of 274.91 - 277.51, but is the sell-off will spill over the global markets, this zone will be quickly broken. The nearest technical support is seen at the level of 273.42- 274.15 and it is a key support zone for the bulls. Any violation of this zone would give bears the control over the market and accelerate the sell-off. The next levels of support are 271.47, 269.90 and 267.90.

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