*Currency traders reacted to the election results over in Australia and India. *Trade war remains the major focal point
European stock markets are kick-starting the week on the back foot as most of the major indices are trading lower. This is due to the trade war fear. China has warned the US that if it wants to negotiate the deal, it needs to do that on equal footing. One thing is for certain, the US cannot bully its way in. Foreign minister Wang Yi made it clear in his phone call to Secretary of State Mike Pompeo that the door is still open to form a deal however, China needs to make sure that its interest is fully protected.
In the currency markets, there have been some serious movements due to the series of major elections. Conservative Prime Minister Scott Morrison won the election in Australia with a surprise victory and this pushed the Aussie dollar higher against the basket of major currencies. The Aussie stock market also jumped higher as a result of this. The exit polls over in India shows that Prime Minister Narendra Modi is poised to remain in power. The stock market valuation remains stretched and the INR also jumped on the back of this exit poll results.
As for the Brexit update, Theresa May is going to try her luck for the last time by pushing her deal for the final time in the parliament. She is betting that her new bold offer will persuade the lawmakers and the members of the parliament. Perhaps, fourth time lucky. She was unable to form any kind of a deal with the labour party leader, Jeremy Corbyn and the talks collapsed on Friday. Mr. Corbyn has said that any deal should be put in front of public in the form of another referendum. The British pound has gained some strength but it is still trading below the critical level of 1.30. The technical analysis shows that the path of least resistance is skewed to the downside.
In the commodity space, crude and brent prices are back in green as investors are betting on the optimism that Saudi Arabia is going to keep the oil supply under control. Key producers in OPEC have signaled their willingness that they are going to keep a tight lid on the supply for the rest of the year but also made a pledge that they will do anything in their power to prevent any genuine shortages.
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