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XTB TRADEBEAT

Oil gives back gains as Iran nuclear deal decision looms

Summary:

  • US President Donald Trump is expected to announce his decision regarding the Iran nuclear accord this afternoon
  • Australian retail sales miss forecasts weighing on the domestic currency
  • China informs it had nearly $7 billion more in a trade surplus with the US

US President Donald Trump tweeted yesterday it would announce his decision with regard to the Iran nuclear agreement on Tuesday encouraging some oil investors to cash in on their recent longs. The decision is to be released at 7:00 pm BST, and even as a majority of market participants expects Trump is going to scrap the accord and reimpose new sanctions against the country oil prices pared their prior gains. Moreover, according to NY Times European delegates were unable to convince Trump to stay in the deal, but there is still a big question mark what he will finally do this afternoon. This has been already mirrored by oil prices trading roughly 1% lower at the time of writing suggesting that some commodity investors fear that Donald Trump could ultimately opt for remaining in the agreement. The nuclear deal was struck between Iran and six countries - the UK, China, France, Germany, Russia and the US - in July 2015.

link do file download linkWTI oil prices got a blow in the aftermath of the Trump’s tweet. However, they managed to stay above a local demand zone suggesting that some buyers came up. Source: xStation5

While Donald Trump drew attention yesterday evening, major attention during the Asian session was paid to China and Australia as both economies released important macroeconomic prints. The former showed that a trade balance in April totalled $28.8 billion as exports grew 12.9% yoy and imports jumped as much as 21.5% yoy - both figures easily exceeded expectations. The details of customs data saw that a direct trade surplus with the United States increased by $7 billion to $22.19 billion pushing the January-April trade surplus with the US to $80.4 billion. The report was definitely not welcome by the Trump’s administration calling on China to curtail its trade surplus by $200 billion annually by 2020.

link do file download linkAustralian retail sales for March brought lousy numbers questioning any hawkish remarks from the RBA. Source: Macrobond, XTB Research

March sales came in at 0% and missed the consensus at 0.2% in a monthly basis. What’s more that data was equally weak when we take a look at a quarterly basis bringing 0.2% vastly falling short of the median estimate at 0.6%. The details saw that except food there was no category acting in favour of the March reading. The sub-par data for March suggests that consumer spending could have slowed during the entire three-month period bringing down economic growth.

link do file download linkThe cross AUDNZD seems to have approached an important resistance from where some corrective moves may be expected. If so, a slide toward the long-term trend line could be attainable. Source: xStation5

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