Trading Day-War fears crush confidence

Orlando, Florida (Reuters) – Trading Day

Understand the forces that lead global markets

Written by Jimmy McGiv, a column writer on the market

In the week that started with investors in a reasonable optimistic mood, it is betting that the United States and China will face a deal in their trade talks in London, which ended with a sour memo, as Israel’s strike sparked a sharp rise in oil prices and a sale in global stocks.

Washington and Beijing have reached a “framework” deal, and despite the presence of some mystery about the details and has not yet been ratified, it helped reduce the tensions of the global tariffs.

Investors’ feelings have also been strengthened by signs that global inflation pressure cools. The numbers of inflation in the prices of consumers and producers from the United States, Japan, India and China were all weaker than expected, although the great warning is the impact of definitions that were not properly felt.

The strong demand for US Treasury bonds that was also at auction this week also led to interests on US debt sustainability. president Donald Trump is still “the big and beautiful bill”, the budget deficit, and the federal religion is waving in the market, but there was a temporary decrease this week.

Not so for the dollar. It fell to its weakest level against a basket of currencies for more than three years and failed to extract any “safe haven” request that distinguishes from the famous geopolitical risks and tensions in the Middle East.

O nonly United States investors continue to reassess their exposure to the assets provided in dollars. Those who want to reduce their exposure either will sell directly assets, buy less, or hedge more. Many long -term investors in Europe increase their hedging rates, which are actually equivalent to selling dollars on a large scale.

Another big step of the week was the oil, which rose about 10 % at one point on Friday. He cools a little, but the ghost of high energy prices suddenly returned. If so, what does this do for inflation expectations?

We may get an insight into what political makers think next week. The Summit of the Group of Seven in Canada begins on Sunday, and three of the most important central banks in the world provide their recent decisions – the Federal Reserve, the Bank of Japan and the Bank of England.

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Main market movements for this week

* oil. Brent crude rose 12 % this week and WTI increased by 13.5 % – one point that rose about 10 % on Friday alone – which represents the largest weekly increase since February and October 2022, respectively. * Gold ends in the week by 3.5 %, within $ 50 of April’s Serecord $ 3500/ounces. * The dollar weakens 1 %, and the week ends near three years, while the euro rises by 1.3 %, after circulating more than $ 1.16 this week for the first time since 2021. But the weekly decreases at the long end of the curve have turned to half of the rise on Friday. * World’s stocks and the end of the Wall Street are slightly lower. Themsci World Hits Hits Hits Records earlier this week, but Friday. S&P 500 decreases by 0.5 % per week, MSCI Worldsheds 0.3 %.