- US President Donald Trump announced cancels the summit with North Korean Leader Kim Jong Un and markets turn risk-off.
- The US plan to impose 25% tariffs on imported vehicles and the fruitless second round of talks between the US and China over trade war also collaborated to the risk-off sentiment on Wall Street.
- USD/JPY was sent down to 108.96 and AUD/JPY was down to 82.38. Gold, on the other hand, picked up the safe haven bid to $1,306/oz.
Following the headlines in Asia yesterday that the US plans to impose 25% tariffs on imported vehicles, Funda-FX today was dominated by the news that Trump cancelled what would have been a historic summit between the two leaders of N.Korea and that of the U.S.
It was announced around the London close that Trump had sent a letter to the North Korean leader, Kim Jong Un, cancelling the meeting. Letter as follows, ( the letter was written entirely in his own words, a senior administration official said):
The cancellation of the meeting followed as a US delegation was left hanging last week in Singapore after their North Korean counterparts failed to show up, a senior US official said. The delegation had been in the city to make the final logistical preparations for Trump's now-cancelled summit with Kim.
French President Emmanuel Macron said he hopes the cancellation of the Trump-Kim summit is “just a hitch” in the peace process. However, the White House squashed such hopes and any notion that a June 12 meeting with North Korean leader Kim Jong Un could still take place. However, Trump's concluding remarks seems to have left the door open for a future meeting with Kim Jong Un.
“Hopefully everything is going to work out well with North Korea. A lot of things can happen. Including the fact that, perhaps, it’s possible the existing summit could take place or a summit at some later date,”
- Trump said.
FOMC minutes risk rally compromised
This was the main news for the day following this week's FOMC minute's fuelled risk rally, yesterday. The FOMC has essentially left two rate hikes on the table for 2018 but has indicated that inflation can run above the 2% target which means there is very little chance of three rate hikes in 2018 and 2019 may be scaled back as well in terms of the pace of normalisation of policy. Markets today responded to the N.Korean news negatively and whatever improved risk sentiment post the FOMC minutes that the bulls had enjoyed was effectively wiped off the table again. The US benchmarks, for example, dropped and the S&P 500 was at one stage down as much as 1.0% on the headlines.
Market reactions
The S&P 500 Index closed lower by 0.20% to 2,727.76 while the Dow Jones Industrial Average fell 0.30% to 24,811.76. The Nasdaq Composite Index closed virtually unchanged losing 0.02% to 7,424.43. The US 10yr treasury yield fell from 3.01% to 2.95%, (another two week low) before steadying around 2.97%, (UK and Germany -4bp, France -5bp). USD/JPY was sent down to 108.96 and AUD/JPY was down to 82.38. Gold, on the other hand, picked up the safe haven bid to $1,306/oz.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD bounces off lows, retests 1.1370
Following an early drop to the vicinity of 1.1310, EUR/USD now manages to regain pace and retargets the 1.1370-1.1380 band on the back of a tepid knee-jerk in the US Dollar, always amid growing optimism over a potential de-escalation in the US-China trade war.
GBP/USD trades slightly on the defensive in the low-1.3300s
GBP/USD remains under a mild selling pressure just above 1.3300 on Friday, despite firmer-than-expected UK Retail Sales. The pair is weighed down by a renewed buying interest in the Greenback, bolstered by fresh headlines suggesting a softening in the rhetoric surrounding the US-China trade conflict.
Gold remains offered below $3,300
Gold reversed Thursday’s rebound and slipped toward the $3,260 area per troy ounce at the end of the week in response to further improvement in the market sentiment, which was in turn underpinned by hopes of positive developments around the US-China trade crisis.
Ethereum: Accumulation addresses grab 1.11 million ETH as bullish momentum rises
Ethereum saw a 1% decline on Friday as sellers dominated exchange activity in the past 24 hours. Despite the recent selling, increased inflows into accumulation addresses and declining net taker volume show a gradual return of bullish momentum.
Week ahead: US GDP, inflation and jobs in focus amid tariff mess – BoJ meets
Barrage of US data to shed light on US economy as tariff war heats up. GDP, PCE inflation and nonfarm payrolls reports to headline the week. Bank of Japan to hold rates but may downgrade growth outlook. Eurozone and Australian CPI also on the agenda, Canadians go to the polls.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.