The dollar is rising, the metals are collapsing

Contrary to popular beliefs that the dollar is cheaper in times of trade wars, we are seeing the extraordinary strength of the US currency. Earlier this morning, the euro fell to 1.1560 against the dollar and is about to test the critical support at 1.1500. What will happen after this test will most likely depend on the medium-term movement of the single currency.
Otherwise, green money reached a 14-month high against the yuan. China urged a vengeance on Thursday if the US threatens to raise tariffs on exports of Asian-produced goods after US President Donald Trump instructed his trade officials to consider raising customs duties on imported Chinese goods from 10 to 25% of Chinese goods for $200 billion.
But as the US imports much more from China than China from the US, investors see the deployment of the trade war, causing worse trouble for the Chinese economy.
Serious problems due to the appreciation of the dollar have metals. Gold went down this morning near the psychological limit of $1,200 per ounce. Silver is traded at 16.20 dollars per ounce and platinum at $823.

Apple with capitalization over $1 trillion, growth for US indices

The big news of yesterday's day is the rise in Apple's market capitalization above the psychological limit of $1 trillion. The question now is, how long will the tech giant hold there.
The US indexes ended yesterday mainly on positive territory.
Best results, of course, had the technological Nasdaq. Driven by Apple's appreciation of 2.8%, the index added 1.2% to its value.
The broad S&P 500 added 0.5% to its value, while the blue chip index Dow Jones recorded a drop of 7 points.
The yield on 10-year US bonds declined again below 3%, although it remained extremely close - at 2.986%. Interest on long-term 30-year government bonds reached a level of 3.118%.

Nothing new from the Fed. How did the markets react?

Fully expected, the Fed kept the interest rate unchanged, with Powell emphasizing the good state of the US economy. This was taken as an impulse to preserve the policy rate of the interest rate reserve.
This negatively affected the US indices and sent the dollar upwards, initiating a decline in metals and raw materials.
The Dow Jones blue chip index lost 81 points, with its most lost components being the industrial Caterpillar and 3M lost 3.4 and 2.3%.
The broad S&P 500 declined by 0.1%, with the industry declining by more than 1%. The Nasdaq Technology reduced its value by 0.5%.
Global financial markets continue to focus on a US-led trade war, especially after the White House administration announced on Wednesday that President Donald Trump offered a higher 25 percent duty for Chinese goods totaling $200 billion.
The euro fell slightly by 0.1%, to 1.16505 dollars.

The Japanese central bank laid the foundation for the yen to fall

The Japanese yen is expected to depreciate against other major currencies, including the US dollar, after the country's central bank did not take action to curb its record monetary stimulus.
After the Japanese central bank meeting, Haruhiko Kuroda announced that the key interest rates in the country would be slightly increased, but did not mention anything about changing the monetary policy of the bank and record monetary stimulus.
Kuroda clearly said this morning that in an environment of continuing low inflation, the central bank has no intention of raising interest rates and will continue to maintain its incentives until targeted inflation is reached.
This largely disappointed investors and traders who were betting on a change in central bank policy. The yen, which had registered a significant growth against the dollar and the rest of the currencies, returned almost everything earned.
Earlier this morning, one dollar swapped at levels of about 112.00 yen.
Kuroda clearly said this morning that in an environment of continuing low inflation, the central bank has no intention of raising interest rates and will continue to maintain its incentives until targeted inflation is reached.

Oil ended July with an increase of between 6 and 7%

Speculation to find a solution in the Red Sea, as well as data on surging oil stocks, contributed to the decline in oil prices. We can recall that at the beginning of the week, the Brent almost reached the 75-dollar barrel again.
Concerns about the deepening US-China trade war, and the potential slowdown in Asia's economic growth, have led to a 30-cents loss for Brent up to $74 a barrel.
Losses of nearly 40 cents were also recorded by US crude oil futures. Together with the fall of Tuesday, the drop in oil is already close to 2%.
Yet, July was a good month for oil. In the seventh month of the year, Brent added 6% to its value, and US crude oil - nearly 7%.

Trump/Yen, Yen/Trump

The Central Bank of Japan apparently took seriously Trump's warning to its main trading partners - not to try to manipulate exchange rates.
According to well-known sources, the central bank of Japan is said to change its monetary policy. The explanation is - to make it more effective. Market participants, however, fear that its preparing for normalization is becoming a reality.
And this led to a fall of the Japanese Nikkei 225 by nearly 300 points and a serious appreciation of the yen. The dollar, which reached trading levels of 113 yen in the past week, traded at levels 111.18 on Tuesday evening.
Indeed, the dollar marked its largest decline against the main currencies for three weeks. The dollar index lost 0.8% of its value on Friday, with the loss of 1% against the yen, the US currency declining 0.7% against the euro.
The bond repurchase program was launched by the head of the Japanese bank in the distant 2013. The aim was to raise inflation.
Now, however, according to experts, the Japanese central bank has to make a lot of effort to persuade Trump's administration that it does not artificially lower the exchange rate of the yen against the dollar.
On the other hand, it appears that 2% inflation targeting the bank is an unattainable goal, even against the backdrop of serious monetary stimulus. Buying bonds, however, has led to an increase in government debt of over 40% over the past five years. At the same time, the goals of the Japanese central bank do not seem to be achieved. And this largely points to the ineffectiveness of the bank's policy.
Interest rates on 20-year Japanese government bonds also rose 6 basis points to 0.535 percent, moving away from their 18-month minimum at 0.475 percent earlier this month.
It has to be mentioned that the currency war is already a fact, as a continuation of the trade between the US and China. On Friday, President Donald Trump accused the major trading partners of the US of manipulating their exchange rates and thus receiving unfair competitive advantages.
We can recall that the trade war between the two leading economies started earlier this month, with the imposition of reciprocal duties on goods for $34 billion.

Strong growth in Europe and Asia after good results from Google

The US indexes ended yesterday's stock market upwards, prompting Asian and European markets to open on a plus today. The growth of European markets, however, was far stronger. The German DAX has risen to levels of trade of nearly 12,700 points, or an increase of over 1% compared to yesterday.
Opening on a positive territory is also shown by US index futures, with the S&P 500 trading at levels above 2,816 points.
To a large extent, the positive mood contributed to Google's results. The parent company, Alphabet, reported yesterday quarterly earnings of $32.66 billion, an increase of 26 percent and acceleration in the same quarter of last year. For comparison, revenue growth in the second quarter of 2017 was 21%.
After the results, the company's shares rose 5% and Alphabet's market capitalization was almost equal to Amazon's. For comparison, Amazon's market estimate is at $874 billion.
Still, Apple's shares remain closest to the boundary line. After good news about the company, its stock continued to rise and its capitalization is already close to 942 billion dollars. So Apple is only about 6% of reaching the coveted $1 trillion, which has not been achieved by any company in history.
So far, more than 17 percent of S&P 500 companies have announced their second-quarter results, with 82 percent of analysts expecting analysts to expect, according to FactSet. Wall Street has high expectations for this reporting season, with analysts forecasting an annual growth of 20%.

Oil is resuming its decline

After yesterday's recovery, the price of oil went down again today. Brent with delivery next month was traded at levels of $73.30 by noon. The risks of oversupply of raw materials have begun to dispel concerns about tensions between the United States and Iran.
Yesterday, the President of the United States addressed the Iranian president a serious threat to Twitter, which was repeated by other officials of the government. All of this, bent market participants, to the expectation of further oil supply problems. It rose to $74 a barrel, but failed to keep up on that level and began to fall again.
Saudi Arabia and large producers are increasing their yields to offset the losses likely to come as the deadline for imposing sanctions approaches.
Meanwhile, US pil reserves at the supply center in Cushing, Oklahoma, increased at the end of last week, retailers have reported, referring to information from the Genscape Market Research Agency.
In the last week of the month, however, inventories in the center are expected to drop, add traders. Further clarity on the state of supply is expected to be made tomorrow after the data on oil stocks in the world's largest economy.
The attention of market participants has moved away from escalating disputes over the impact of world trade on global economic growth and the demand for energy sources and raw materials.
Over the weekend, the G20 financial leaders voiced concern about the global economy's risk that may be the trade strain between the United States and China.

Bears rule: the market on Friday found no reason to rejoice

On the evening of Friday, the US dollar lost against the euro and let it grow. The main currency pair is above 1.1720. The risk for the euro is Italy with its political imbalance, besides some of the politicians again mention the possibility of the country's exit from the euro area - this is not the driver at which the single European currency can rise in price.
In oil, the "bulls" are trying to win back part of the weekly sales, but in the last couple of weeks, no one has gone up for black gold effectively. A barrel Brent opens the week with worth about $73.07, the resistance is at $73.50 and $73.75 respectively.
The gold closed last week near historically low levels, at a price of $1,233.60.

New ESMA regulations

ESMA (European Securities and Markets Authority) has negotiated measures related to the offering of CFDs and binary options to non-professional traders in the European Union (EU), and these include:

• Binary options - prohibiting the marketing, distribution or sale of binary options to non-professional clients;
• Contracts for Difference - Restricting the marketing, distribution or sale of CFDs to non-professional traders. 

The limitation includes: thresholds for the use of leverage when opening a position; a margin rule for closing positions; measures to protect against a negative balance on the account; preventing the use of commercial incentives by the CFD providers and a strict risk-specific warning through standardized formulation.
Arrangements for CFD and Forex Trading:

• The leverage thresholds for opening a position of non-professional traders are 30: 1 to 2: 1, this ratio varies according to the volatility of the underlying asset.
• Margin Rule for Closing Account Items. It determines the percentage margin (50% of the minimum required margin), whereby providers must cancel one or more open positions with CFDs to a non-professional client.

ActivTrades will apply the new ESMA measures from July 29, 2018 at 11:00 am (CET).
If you don't like to change your trading style, you could apply for Professional Trading Account. Check your eligibility here.
Alternatively, you could open an account in new ActivTrades office in Bahamas without being affected by the new measures from ESMA.