Renewed Fears of a Prolonged Trade War

Wells Fargo Research Team Wells Fargo

U.S. Review - Inversion Aversion

Markets gyrated this week as the spread between the ten- and two-year Treasurys turned negative for the first time since 2007, as financial markets seem to expect that the sharp slowdown in growth overseas will soon spread to the U.S.

Economic data this week, however, continued to say otherwise. Retail sales again beat expectations, rising 0.7% in July, while the 1.0% rise in control group sales sets up for another strong PCE reading in the third quarter.

CPI inflation firmed, with core prices rising 0.3% for the second straight month. We still expect the Fed to cut rates again in September.

Global Review - Renewed Fears of a Prolonged Trade War

Trade tensions between the U.S. and China remained a prominent theme in markets this week. Although the U.S. delayed tariffs on some imports from China until December, it may not be enough to stop Chinese retaliation.

U.K. economic data released this week suggest the consumer sector has held up relatively well despite Brexit and political uncertainties hanging over the economy.

Mexico’s central bank cut its key policy rate for the first time in over five years, noting increased global risks and expectations of further monetary policy easing by several other central banks.

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Wells Fargo Research Team

Wells Fargo

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.