Oil prices rose early on Monday ahead of a meeting between OPEC and U.S. shale firms in Houston, raising expectations that oil producers would discuss further how to clear a global oil glut. Oil ministers from the Organization of the Petroleum Exporting Countries (OPEC) and other global oil players are set to gather in Houston as CERAWeek, the largest energy industry conference, begins on Monday.
In the currency market, the euro clawed back earlier losses on Monday but remained prone to volatility as early counts in Italian elections pointed to stronger-than-expected results for euroskeptic parties, with no major party blocs winning an outright majority. The common currency found some support as Germany’s Social Democrats (SPD) decisively backed another coalition with Chancellor Angela Merkel’s conservatives.
The Impact of the steel tariffs inflationary concern is tangible and could give cause for the Fed to raise interest rates four times this year. As far as Gold traders are concerned, however, the inflationary impact of trade war escalation will overwhelm the effect of higher US interest rates. And despite the prospect of higher US interest, it will not translate into a stronger due to inflationary concerns. So any escalation of trade wars will significantly dent the US dollar appeal, weigh negatively on US assets such as bond and equities and make gold the go-to hedge against rising US fiscal and political vulnerabilities.
The economic calendar comes today includes the UK Services PMI and the US ISM Non-Manufacturing PMI. Moderate to high volatility is expected for the release of these two-economic data as they are the main highlight today. Besides these two, in Eurozone area a number of services PMI will be released with little impact on the market expected.