By Deepta Bolaky
 @DeeptaGOMarkets

Equity Markets

Trade tariffs are taking unpredictable directions, which caused the stock market to see another day of decline. Regulatory fears are also adding to the current uncertainties and oscillating risk sentiment.

The U.S. Justice Department is looking at the practices of the big technology forms as part of a broad review into potential anti-competitive behaviour among big tech companies. Even though the debates were being carried out for over a year, Monday was the day where the markets were made aware of early stages of action.

• Amazon’s share price was down by 4.64% on reports that the Federal Trade Commission (FTC) has the e-commerce giant on their radar.

• Alphabet, Google’s parent company dropped by 6.12% on the news that the company will be investigated for breaking anti-trust laws.

• Apple dropped by 1.01% as the U.S Department of Justice is also considering investigating the company for an anti-trust probe.

• Facebook fell by 7.51% as it was reported that the FTC secured the right to examine how the social media company practices affect digital competition. 

Source: Bloomberg Terminal

Wall Street ended in the red on Monday as US regulators prepare for anti-trust probes in an already risk-off environment due to tariffs concerns.

Currency Markets

In the FX currencies, the US dollar lost ground against major currencies in the European and US session compared to the Asian trade.  The dovishness from Fed’s Bullard speech regarding interest rates is weighing on the greenback.

 “A downward policy rate adjustment may be warranted soon to help re-centre inflation and inflation expectations at target and also to provide some insurance in case of a sharper-than-expected slowdown.” – Fed’s Bullard.”

Source: Bloomberg Terminal

The broad sell-off of the US dollar helped other currencies to nudge higher. The Australian remained somewhat resilient despite the highly anticipated rate cut from the RBA later today. AUD is currently trading at 69.70 US cents.

AUDUSD (Daily Chart)

Source: GO MT4

Commodities Market

Despite a few bullish news on the supply side, trade war uncertainties are fuelling the downward pressure on oil prices as the demand outlook is weighing heavily on oil prices.

WTI is currently trading at $53.12 while Brent Crude is in the vicinity of $61.28. It has plummeted and is nearing bear market levels. It is now finding support on  Saudi Arabia signals that supply cuts will continue.

Oil prices experienced the worst decline in six months and the pledge made by the Saudis to rebalance the markets might limit the fall if the upcoming weekly reports are positive.

“And I would like to reiterate my confidence, based on my discussions with several key producers, and on our track record, that we will do what is needed to sustain market stability beyond June,” al-Falih told Arab News in an E published on Monday.

UKOUSD and USOUSD (Daily Chart)

Source: GO MT4

The recent upsurge is Gold confirmed the risk-off trading environment whereby money is flowing into safe-havens. XAUUSD is currently trading at $1,325 and has added 2.87% over the last three days. The Fed’s comments, trade tensions and the sell-off in the US tech sector could see the yellow metal gather more strength. On the technical side, the pair is in the oversold conditions territory with the R1 at $1,332.95

XAUUSD

Source: Bloomberg Terminal

Cryptocurrencies

The cryptocurrencies market is struggling this week. Bitcoin, the bellwether of cryptocurrencies are showing pullback signs. As of writing, BTCUSD has fallen by more than $700 or 8% below the $8,000 mark.

BTCUSD (Hourly Chart)

Source: GO MT4

Key Upcoming Events Ahead

BRC Like -For -Like Retail Sales and Markit Construction PMI (UK)
Retail Sales, RBA Rate Statement & Interest Rate Decision and Governor Lowe Speech (Australia)
Unemployment Rate, Consumer Price Index (Eurozone)
GDT Price Index (New Zealand)
Fed’s Chair Powell Speech and Factory Orders (US)

Wednesday, 05 June 2019 Indicative Index Dividends Dividends are in Points
ASX200	WS30	US500	US2000	NDX100	CAC40	STOXX50
0.625	9.224	0.346	0.024	0.696	1.221	0
ESP35	ITA40	FTSE100	DAX30	HK50	JP225	INDIA50
0	0	0	0	23.732	0	0

Disclaimer: Articles and videos from GO Markets analysts are based on their independent analysis. Views expressed are of their own and of a ‘general’ nature. Advice (if any) are not based on the reader’s personal objectives, financial situation or needs.  Readers should, therefore, consider how appropriate the advice (if any) is to their objectives, financial situation and needs, before acting on the advice.