Brace for the World Economy's Most Important Week of the Year
Comment of the Day

June 11 2018

Commentary by Eoin Treacy

Brace for the World Economy's Most Important Week of the Year

This article by Simon Kennedy for Bloomberg may be of interest to subscribers. Here is a section:

Trump and North Korea leader Kim Jong Un convene in Singapore for their on-off summit, the first such meeting ever.

Trump last week predicted “great success” and said it’s possible he could sign an agreement with Kim to formally end the Korean War. Back in Washington, the government releases a monthly report on inflation that will be a key gauge of how hot -- or not -- the U.S. economy is getting.

Trump, Kim Said to Be Planning One-on-One Talk at Summit Start

These Are the Dealmakers Behind Trump and Kim

What a Trump-Kim Deal May Look Like

Eoin Treacy's view

The Trump – Kim conference is going to be short with both planning to leave Singapore tomorrow afternoon Singapore time. That means an outcome, whether positive/negative will be available by the open on European markets Tuesday. It is in both their interests to appear strong but they both need to come away with a win so the most likely scenario is to agree to meet again.

South Korea’s won remains steady while the stock market is firming from the region of the trend mean.

Italian yield compressed following the new government’s recommitment to the Euro.

The Pound weakened against the Euro, as the long-awaited vote on Theresa May’s Brexit legislation approaches parliament. Every time the rate has moved above €1.14 the market has been optimistic the UK will remain closer to the EU so current sentiment is veering towards a more distant relationship.

The Dollar is trading back above the 100 level against the Yen on the assumption that the Bank of Japan is likely to be last of the major central banks to exit its quantitative easing program.

The weaker currency has been a tailwind for the stock market in nominal terms. Importantly, the Topix 2nd Section Index, which is often a leader, has bounced twice from the region of 7000 and a sustained move below that would be required to question potential for additional upside.

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