Trade war concerns continue to dominate markets. Global equity markets and commodity prices have fallen further after President Donald Trump instructed US Trade Representative Robert Lighthizer to identify $200 billion worth of Chinese goods for additional tariffs at a rate of 10%. Trump has said he will impose these new tariffs if China refuses to change its “unfair trade practices” and insists on going forward with recently announced tariffs.
Overnight the latest Global Dairy Trade auction resulted in a slight fall in prices with the overall index down 1.2% following on from a 1.3% fall at the previous auction a fortnight ago. Both WMP index and the SMP index edged down circa 1% while the lactose index (LAC) was the big mover gaining 8.2%. Butter milk powder which surged by 17.7% at the previous auction was not offered at this morning’s event.
The latest US housing report has sent mixed signals to the market with housing starts rocketing by 5.0% an annual rate of 1.350m in May, while for the same month building permits plunged by 4.6% to an annual rate of 1.301m.
This morning European Central Bank President Mario Draghi, while speaking at a central banking conference in Sintra, Portugal reiterated that the ECB will adopt a patient approach to tightening policy, signalling that interest rates will remain on hold till the end of the 2019 European summer.
Crude oil prices have slipped lower on speculation that OPEC will agree to up production after this week's meeting in Vienna. Russia is also widely expected to increase its supply.
Global equity markets continue to fall- Dow -1.12%, S&P 500 -0.51%, FTSE -0.36%, DAX -1.22%, CAC -1.10%, Nikkei -1.77%, Shanghai -3.78%.
Gold prices have edged lower, down 0.2% trading at $1,276 an ounce. WTI Crude Oil prices have given back yesterday’s gains, down 1.6% trading at $64.72 a barrel.
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