Market Wrap

• On Monday, the financial markets were shattered overnight as China retaliated to US tariff increases with some of its own. Global markets reacted strongly as the trade war escalated.
• The New York Stock Indices took the brunt of the pain with the Nasdaq down 3.41%, the S&P and Dow were hit as as well, closing 2.41% and 2.38% down respectively.
• Whereas, the Asian markets are expected to follow on with the downward momentum on their open.
• The retaliation news boosted safe-haven appeal, and gold prices climbed nearly three months on Monday to trade over the $1,300 psychological level.

What’s Next?

Looking ahead to today’s session, once again it’s thin on the ground in terms of significant data releases. However, traders’ focus will remain on the UK’s employment and Earnings data due for release.

GBP – Average Earnings Index 3m/y
It’s a leading indicator of consumer inflation and shows a change in price for businesses and the government pay for labor, including bonuses. Put simply, when companies pay more for the work, the higher costs are usually passed on to the consumer which leads to inflation.

The UK’s Office for National Statistics reported 3.5% average earnings in March, whereas, economists are expecting it to be at 3.4% this month.

GBP – Unemployment Report
It’s one of the most eyed economic data as it shows a change in the number of people claiming unemployment-related benefits during the previous month. The upcoming jobs report is expected to be neutral. Jobless claims are expected to drop from 28.3K to 24.2K in April.

While the Unemployment Rate is expected to remain unchanged at 3.9%. Indeed, the bigger number show slacks in the labor market, and it will pressure BOE to keep the rates stable to 0.75%.

EUR – German ZEW Economic Sentiment
The Zentrum für Europäische Wirtschaftsforschung will release numbers at 9:00 GMT. The data is expected to surge to 5.1 vs. 3.1 previously.

For the beginners, it’s a survey of about 300 German institutional investors and analysts which asks respondents to rate the relative 6-month economic outlook for Germany.

The figure used to be in the range of 15–20 before April. But due to adverse economic conditions, rising Debt to GDP ratio and strikes, it’s pretty clear that German institutional investors are losing confidence in the economy. So, that’s another reason to expect a continuation of bearish sentiment in Euro.

It’s been a good beginning to this week as team FX Leaders closed 4 winning trades. So, be ready to trade the forex trade setups and forex trading signals today. Good luck.