ECB rate cut, US tariffs and BRICS

Important News for the day

• Fri, 31st, – CET DE German prelim CPI.

• Fri, 31st, 14:30 CET CA Gross domestic product.

• Fri, 31st, 14:30 CET US Core PCE price index.

US tariffs

President Trump will start implementing new tariffs over Canada and Mexico. Both are important trading partners for the US. Still the decision remains pending, whether oil imports will not be affected for both countries. Starting on Saturday other goods might face the aforementioned tariffs. On another note the President might also impose tariffs of 100% on BRICS countries should they continue their plans in implementing their own currency away from the Dollar.

Market talk

The Dollar shows signs of strength. Yesterday’s ECB interest rate decision has caused the EUR to lose further strength as the rate cut negatively impacts the common currency. The interest rate differential might also play a role where, which should further support the Greenback. Equity markets still remain well- bd and continue their path to the upside. Yet the sharp rise of the German DAX in January might be questionable. Will the market face a correction at some point here? In general oil is trading just at th 50- moving average based on the daily chart. The adjustment of the US policy might cause the market to weaken further. Precious metals look positive. Silver keeps trading above the USD 31.00 with further upside potential, whereas Gold has created a new all- time- high. 

Tendencies in the markets

• Equities positive, USD stronger, cryptos sideways, oil weaker, Silver positive, Gold positive, JPY stronger.