· The euro was lower on Monday as fears over the prospect of a global trade war and fresh political uncertainty in Germany pressured the single currency, while the dollar pared back overnight gains against the safe haven yen.
EUR/USD was down 0.47% to 1.1628 by 03:56 AM ET
The single currency was also pressured lower after U.S. President Donald Trump ratcheted up trade tensions with the EU, claiming overnight that it treated the U.S. very badly and was “possibly as bad as China, just smaller”.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.39% to 94.60, boosted by the weaker euro.
The dollar pared back gains against the yen, with USD/JPY last at 110.74, after hitting a six week high of 111.06 overnigh
· Investors have sharply increased their use of hedging strategies, signalling concerns that the intensifying trade battle between the United States and China might hit economies from Germany to South Korea.
Money managers say that mounting barriers to trade between the United States and trading partners — Washington’s latest proposal for tariffs on $675 billion (512.4 billion pounds) of Chinese goods is expected to elicit a response from Beijing — is prompting them to look for ways to protect profits in the event equity markets take a dive after years of growth.
· Hundreds of Mexicans living in California drove for hours on Sunday to vote south of the border for Andres Manuel Lopez Obrador as president, persuaded by his pledges to stand up to U.S President Donald Trump and end graft and violence at home.
Exit polls Sunday evening showed Lopez Obrador had won by a large margin, and his rivals both conceded shortly after polls closed.
· The United States could get a new round of retaliatory tariffs worth as much as $300 billion, if it moves ahead with new duties on European cars, the Financial Times reported.
· German Chancellor Angela Merkel on Monday will make a last-ditch effort to end a migration row with her conservative allies by holding more talks with her interior minister, whose offer to resign cast doubt over whether her fragile government can survive.
Horst Seehofer offered to quit his ministerial post and the chairmanship of the Bavarian Christian Social Union (CSU) at a marathon party meeting on Sunday to discuss whether immigration proposals Merkel brought back from Brussels last week were acceptable.
Merkel’s Christian Democrats (CDU) relies on the CSU to maintain power through a coalition, also including the Social Democrats (SPD), formed three months ago after an election in September.
· Mexico’s new president Andres Manuel Lopez Obrador said he would pursue friend and foe alike in a crackdown on corruption after voters handed him a powerful mandate for government with a landslide election victory on Sunday.
Lopez Obrador, the first leftist president since the end of one-party rule in 2000, won between 53 and 53.8 percent of votes, according to a quick count by the electoral authority, more than double the total for his nearest rival.
· The direction in the crude oil market this week will be primarily determined by trader reaction to a possible increase in production by Saudi Arabia. Since most headlines dealing with increased supply tend to be bearish, we expect to see a volatile reaction to the downside early in the week. Although talk of increased supply tends to drive prices lower initially, buyers may jump in on any sizeable price dip because over the near-term, traders are still expecting a tightly supplied market. This further supports the case for increased volatility and a two-sided trade
· Oil prices fell on Monday as supplies from Saudi Arabia and Russia rose, and as signs of an economic slowdown in Asia dented the outlook for demand.
Brent crude oil futures LCOc1 were at $78.29 per barrel at 0645 GMT, down 94 cents, or 1.2 percent, from their last close.
U.S. West Texas Intermediate crude futures CLc1 were down 67 cents, or 0.9 percent, at $73.48 a barrel, after rising more than 8 percent last week.
Reference: Reuters,CNBC
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