POTUS comparing his and Little Rocket Man’s height before their meeting?

I hope you all a great weekend. Here’s what it had to offer on headlines.

  • The G7 comes all down to this really. No joint communiqué signature and Kudlow calling Trudeau’s final G7 presser a stab in the back as the Canadian PM said Canada would take retaliatory measures next month in response to Trump’s decision to slap tariffs on steel and aluminium imports from Canada, Mexico and the European Union. Trade frictions are here to stay as Trump renews how warning over auto tariffs.
  • Communiqué there was though.
  • Merkel ready to act on counter measures against US steel and aluminium tariffs.
  • These two were laughing their brains out at the US-G6 fight. On Sunday, Xi and Putin toasted the expansion of the Shanghai Cooperation Organisation.
  • France and Germany discussed the European roadmap on Saturday, still have differences .
  • Business as Usual in Schweiz. Referendum fails by 75% votes against. Jordan can relax and continue his show.
  • UK PM May :trade proposals will not be published until after EU summit
  • EU Barnier may try to force Uk to accept open borders in return for a deal.
  • One Brexiteer has some explanation to do it seems.
  • Nicola “Braveheart” Sturgeon calls for more Scotland indepedence
  • Meanwhile in Spain, the Basques are now back in the picture. Good luck PM Sanchez
  • Italy’s new coalition government has no intention of leaving the euro and plans to focus on cutting debt levels, Economy Minister Giovanni Tria said on Sunday.

A messy start of the week to be expected as we are revving up to a big CB (Fed, ECB and BOJ) and data week.Add that UK parliament is to vote on the UK withdrawal bill on Tuesday as well and the historic US-NK meeting in Singapore.
We’ll have to take this one step at the time. We’re opening with some mild risk off but CAD especially weaker thanks to that kindergarten G7,Trump and Trudeau steering this to a personal vendetta it seems. Euro is ignoring the car tariff threats for now, Italy is calming some nerves. GBP smalls weaker on PM May’s Brexit proposals likely not making it for the end of June EU summit.
USDMXN is a bit higher but surprisingly not that much compared to the Friday close.
Abe seemed very distant from it all at the G7, clearly not knowing if he needed to support his golf buddy or the French hand shaker. JPY should benefit from risk off start of the week but the uncertainty about the US-Japan tariff and investment situation, coupled to weaker Japanese economic data and FED/BOJ later on could see some nasty reversals at any time. The Trump-Kim meeting could influence to but since DT’s been watering down expectations, it may turn out a total dud.

Tomorrow we kick off with the Norwegian CPI and UK manufacturing, industrial production a construction output. Have a look at the weekly calendar to see the all fun that awaits us for the rest of week.
The FED is to start the CB ballon Wednesday. Another hike coupled to the negative trade headlines could see more nasty spikes in USDEM imo. Unless Powell has a rabbit up his sleeve to calm markets.
ECB could/or not announce Sep as the end of the asset purchases. Will Draghi use the G7 failure excuse to push the announcement out to July? In which case the markets may take it as another disappointment after the renewed weaker German data and the auto tariff overhang.
BOJ may revise inflation lower but for now no new helicopters expected, unless (again..) they judge it necessary to counter auto import tariffs with more stimulus.

Be careful out there, especially tonight as the markets are still very illiquid and Australian markets are closed to celebrate the Queen’s Birthday today.
I’m not taking any chances in saying it’s going to be a roller coaster of a week again. I would be very surprised to just copy/paste the Sunday opening rates come Friday night. I wish everybody a fruitful week in our company again.

Stay safe and happy hunting



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