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Market Update

EncoreFX’s daily market updates are written by our experienced and professional dealing team.

Uncertainty Looms Over North Korean Summit | Markets Await Federal Reserve Minutes

Published May 23, 2018
  • President Trump has stated that there is a serious likelihood his summit with North Korean leader Kim Jong Un “won’t work out” during a meeting with South Korea’s Moon Jae In. Optimistic anticipation regarding the meeting in Singapore has now turned to pessimism; Washington has provided much grandiloquence regarding the summit, however, many inconsistencies remain in the approach to structuring the high-level meeting.
  • Euro-area economic development has broadly disappointed as growth has slowed much more sharply than expected this month. Alongside weaker inflation, concerns have intensified that there will be no return to the euro zone’s previous grandeur. While expansion still remained relatively strong, growth slowed to a two-year low in the bloc’s largest economy, Germany, and the lowest in eighteen months for France, according to the latest IHS Markit purchasing managers’ surveys.
  • There has been relative calm in the markets prior to the Federal Reserve minutes publication today. The Federal Reserve’s meeting at the beginning of the month debated major topics and some new ideas that may influence future decisions. Fed officials kept rates steady after the May 1-2 meeting and made only minor adjustments to statements, which may signal a willingness to tolerate inflation above the 2% target. The popular opinion within the Fed remains a targeting of two or three more rate hikes this year.
  • Pressure from potential increases in OPEC crude output has softened the recent oil rally. Covering any shortfalls in supply from Iran and Venezuela has been a primary focus for investors. Brent crude futures were down to $78.82, while WTI crude fell to $71.74 a barrel at the time of writing. Oil prices have also been affected by rising geopolitical tensions that could dent global output just as demand is set to hit 100 million barrels per day in the final quarter of this year, according to the International Energy Agency.