After the Dow Jones industrial Average fell 84 points on Friday, the Asian markets have followed suit with the Nikkei225 and Hang Seng currently showing losses of 171 and 130 points respectively.
Speculation of an economic slowdown in China are causing the markets some concern as this would have a significant effect on the global economy but again the major concern is the ongoing trade tensions between China and the United States. The U.S. are gearing up to release the list of Chinese goods that will be subject to import tariffs of a total of $50bn.
With three major Central Bank meetings last week and a slew of economic data being released, there was plenty to occupy the markets last week. The upcoming week is much lighter on economic data with the exception of Thursday’s rate decision in the United Kingdom but with all the main Central Bank Governor’s having opportunities to speak this week, we are guaranteed volatility in the major currency pairs. Trade tensions linger.
Mario Draghi will deliver the opening remarks at the ECB Forum in Portugal later this afternoon. On Tuesday morning, he will talk again and then on Wednesday he will be joined on a panel discussion by the heads of the U.S., Japanese and Australian Central Banks.
Mark Carney will address the Mansion House dinner later on Thursday after he has taken questions following the Bank rate decision earlier in the day.
We remain long GOLD at 1278.50