Global stocks mixed ahead of G20 summit in Japan

Global stocks were mixed today as traders continued to focus on the upcoming meeting between Donald Trump and Xi Jinping at the G20 summit. Reports indicated that China had a number of preconditions for going back to the negotiating table. Xi will ask Trump to halt further tariffs, remove the previous tariffs on $200 billion worth of goods, and remove the ban on Huawei. Trump on the other hand has warned that he will impose tariffs on additional goods worth more than $300 billion if the talks are unsuccessful. The two leaders come to the G20 facing a slowing economy in their respective nations. In China, the Shanghai composite and A50 indices rose by 0.70% and 1.30% respectively while in Europe, the Stoxx declined by 20 basis points.

The euro was relatively unchanged against the USD after mixed economic data from the European Union. In Spain, the headline consumer price index (CPI) rose by 0.4% in May. This was lower than the consensus estimates of 0.8%. The harmonized CPI rose by 0.6%, which was lower than the estimated 0.8%. In Italy, business confidence in June declined from 101.9 to 101.8 while the consumer confidence declined from 111.6 to 109.6. In the EU, the industrial sentiment declined to -5.6 from the previous -2.9. The business and consumer survey declined from 105.2 from the previous 103.3. On a positive side, the German headline CPI rose by 1.6%, which was higher than the previous 1.4%. On a MoM basis, the headline CPI rose by 0.3%, which topped the forecast of 0.2%.

The US dollar index was relatively unchanged after the US released relatively unchanged data. The final reading of Q1 GDP remained unchanged at 3.1% as expected. The GDP sales in the quarter increased by 2.6%, which was better than the expected 2.5% while the core PCE prices increased by 1.20%. This was better than the consensus estimates of 1%. On the negative side, the initial jobless claims increased by 227K while the continuing jobless claims increased to 1,688k, which was above the expected 1,665k. 

EUR/GBP

The EUR/GBP pair moved slightly lower after the mixed economic data from the EU. As of writing, the pair is trading at the 0.8945 level, which is lower than the weekly high of 0.8975. On the hourly chart below, the pair is below the 14-day and 28-day moving averages while the RSI has been moving on a downward trajectory. The accumulation/distribution indicator has been moving lower too. The pair is likely to continue moving lower to test the important level of 0.8915.

USD/JPY

The USD/JPY pair moved higher ahead of the important G20 summit. It rose after Donald Trump started questioning the US-Japanese alliance and whether it is fair to the US. On the four-hour chart below, the pair reached the 108.10 level, which is along the important 23.6% Fibonacci Retracement level. The price is also above the 14-day and 25-day moving averages and along the important yellow resistance level shown below. The pair will likely continue the upward trend to test the important resistance level of 109, which is slightly above the 38.2% Fibonacci Retracement level.

EUR/USD

The EUR/USD pair was relatively unchanged today. The pair is trading at 1.1372, which is almost where it was at market close yesterday. On the hourly chart, this price is above the important support of 1.1342. On the chart, the price is along the 28-day and 14-day moving averages. The Chaikin Oscillator has remained above the important neutral line. The pair could remain at these levels and move in either direction in the US session.