USD holds firm at the end of the week, Italian stocks plummet

4:46 PM July 19, 2019

Summary

- Mixed stock session in Europe, Wall Street ticks higher
- USD trades as the strongest G10 currency
- Canadian retail sales disappoint
- UoM consumer sentiment misses estimates slightly
- Italian stocks sink on domestic politics

The US dollar has seen increased volatility over the night on the back of a bag of dovish remarks from Fed’s Williams and Clarida which were clarified by the Federal Reserver thereafter, sending the greenback higher again. Their remarks focused on monetary policy timing suggesting that there is no point in waiting until things get so bad to have a dramatic series of rate cuts. In the eyes of financial markets they said “a 50 bps rate cut is on the table at the Fed’s July meeting”.

The US dollar lost some shine after the release of UoM consumer data, which missed expectations. However, the data is unlikely to discourage Fed from cutting rates therefore it is to a huge extent non-event. Earlier, US dollar pared some gains as Trump once again mocked the US central bankers via Twitter.

Bayer moved reasonably higher on Friday thanks to the news relating to the massive $2 billion Roundup verdict. According to the latest news, the German chemical company may get a reduction of the verdict of 90% or more. California judge said that $2 billion verdict exceeded the limits allowed by the legal precedent. In turn, the fine is likely to be reduced to the $150-250 million range.

Italian FTSE MIB plunged on Friday as investors decides to take some profits amid uncertainty relating to the Italian politics. Namely, the Italian Deputy Prime Minister and leader of the League, Matteo Salvini, is considering whether to chase snap elections and try to form a new government.

When it comes to the commodities markets, the situation is a bit mixed. Both gold and silver trade lower snapping winning streaks. Brent is trading higher while WTI is quoted flat. Agricultural commodities trade higher with wheat and soybean leading gains. Industrial metals trade mixed with copper price being high and nickel pulling back. 

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