Oil with a strong downturn before Trump-Iran

Oil prices plunged 4% yesterday after media reported that Trump would most likely withdraw from the Iranian deal with the nuclear program.
The question now is how quickly Trump sanctions will be imposed on Iran and whether this will meet market expectations.
According to a report by The New York Times, President Trump has told French President Emanuel Macron that he will restore sanctions to Iran and will impose additional economic sanctions.
Macron has denied this information, quoted by Reuters.
Oil prices will continue to be extremely volatile and to be influenced by news related to Washington-Iran relations.
The Brent lost 2.3 percent of its value to $74.42 a barrel, while US crude futures fell 2.8 percent to $68.73 a barrel.

Dollar should not yet waiting for pleasant surprises from the Fed

After an impressive rally, the dollar shows a local correction against the major currencies. The euphoria of the bulls over the yield growth of the bonds faded - the yield indicator of 10-year securities has moved away from the highs of four years ago, although it is held near the 3% mark, keeping the American currency from a more significant drawdown.
In the wake of the rally in profitability, the expectations of four Fed rate increases this year instead of three were returned to the scene. Next week, the Fed will hold a meeting, but changes in monetary policy are not expected this time. The danger for the dollar in the context of this event is that recently the market's belief in more active policy tightening has significantly strengthened. Accordingly, players will expect more aggressive rhetoric from the regulator.
However, the Central Bank can still take a wait-and-see attitude and refrain from premature "hawkish" signals, so as not to run ahead. Moreover, the situation in foreign policy is not at all smooth, and, given Trump's unpredictability, new conflicts can await ahead.
However, at this stage, the chances for a peaceful resolution of trade contradictions with China are growing. China today urged Washington not to aggravate their trade relations. Next week, US Treasury Secretary Stephen Mnuchin and several other White House officials will travel to China to negotiate trade. If there are encouraging statements from this front, this will support both interest in risk and the dollar.

Trump conducts moods on the oil market

At the end of Thursday's trading, Brent oil found the strength to return to positive territory and closed at around 68.50. The extinction of escape from risks brought temporary relief to the raw materials segment, which simultaneously had to put up with the strengthening of the dollar. But already at the start of today's trading the situation has changed - quotes of black gold opened with gap down and again traded below level 68.
A new wave of risk aversion, which covered the oil market, was raised by Trump, who spoke about considering the introduction of tariffs on Chinese goods for another $100 billion. After a small lull, this was another blow to the markets, which renewed concern over the incitement of a trade war. Considering that China is serious and has repeatedly expressed its readiness for this confrontation, after some time, Beijing can voice the next response measures, which creates an additional negative for risky assets.

The dollar is a warning of a serious economic slowdown

The value of the dollar has yet to be lowered, according to some analysts who believe that there is still room for adjustment before the dollar gets better. And this downturn can be predetermined by fears for global economic recovery, analysts say.
President Trump's tariffs risk launching a global trade war that could hurt global growth, market observers say.
The dollar lost 7 percent against the yen from its peak on January 8 this year. This is interpreted as an annual loss of 34%, according to Bloomberg.
At a time when the world economy is just beginning to emerge from the crisis, one thing that could hurt this cycle is a trade war, and we are in the first phase of it, said Boris Schlossberg, Managing Director of BK Asset Management. According to him, the yen reflects this threat better, faster and stronger than other instruments.
The IMF head, Christine Lagarde, also warned of the negative impact of a potential trade war. If we witness a trade war, it will affect trade volumes and reduce global growth, Lagarde said.
Historically, the dollar has weakened as a result of fears of protectionism and trade wars. When former presidents like George Bush and Bill Clinton presented a wide range of import taxes in 2002 and 1995, the markets were selling the dollar as its value declined by 15% overall.

Gold fell on Wednesday

Gold also fell on Wednesday, due to fears of a trade war and the resignation of Trump's economic adviser. Since its rise from the previous days, as a result of political instability, the noble metal has fallen to trade levels from $ 1,325 per ounce.

This happened despite the observed decline in dollar levels compared to other major currencies. The euro, for example, rose to levels above 1.2400 this week, staying permanently above this limit, and seems likely to attack the next key level at 1.2500.

Jerome Powell expects interest rates to rise further

Federal Reserve Chairman Jerome Powell and President Donald Trump's nominee for Fed's head of office expects interest rates to continue rising from their current levels.
According to him, the FED's goal is to maintain a strong labor market and to move inflation to target levels. In this regard, FED expects the interest rates to rise further from their current values ​​and the size of the balance to gradually decrease.
Powell also said that the Fed's objectives would continue to maintain strong financial system, with financial and regulatory reforms being gradually made.
The key question facing Paul is most likely - how the Fed will continue to sustain and stimulate the third longest expansion in US history and how far the planned regulatory relief for the financial system will be stretched.
While Janet Yelan inherited a relatively weak state economy, still aware of the effects of the debt crisis, Powell will inherit a rather strong economy.
Powell also said that if he was appointed to the post, he would continue to support the growth and progress of the economy to full recovery.

Ron Paul: 25% correction of the markets and 50% growth for gold is not excluded

In an interview with CNBC, Ron Paul, a former GOP president, said the US economy is probably not as strong as everyone expects and the situation could become "ugly" by October.
According to him, if the market drops by 25% and gold is rising by 50%, it would not be a shock.
Such a scenario would take the broad US S&P 500 index to a level of $1,819 and gold to $1,867 per ounce relative to current levels.
Paul is known for his bearish expectations and open-ended critic of the Trump administration. He also often criticizes the Fed for maintaining interest rates at too low levels for too long.
This, of course, is not the first time that Paul predicts an adjustment. He did the same on June 28 2016, or just a year ago. Since then, the S&P 500 index has risen by 21% and Dow has added 24%. Technological Nasdaq is traded with an increase of 34%.
Paul, however, continues to hold on to his thesis.

Danske Bank: Uncertainty about the economy of Trump may lead the Fed to raise rates only twice in 2017

As expected, we have not learned many new from FOMC, as most members of the committee have already expressed their views after its meeting in February. The head of the Federal Reserve Janet Yellen also spoke, as she did in mid-February before Congress.
FOMC members believe that the economy continues to show improvement, but Trump's economics makes predicting future decisions indefinite. The word "uncertainty" was mentioned in the minutes of FOMC 14 times. This is slightly less than in December, when it was mentioned 15 times, but significantly more than in November, when Donald Trump won the elections (only 5 times).
Although most members of the Commission expect that the increase in interest rates will happen "very soon", only a small portion of the hopes are that this will happen at the meeting in March. This confirms the opinion of analysts of the bank that the increase in interest rates in March seems unlikely. The Fed can not afford to sit on the fence, pointing to the strong dollar and inflation, which remained below the target level of 2%.
The bank analysts continue to believe that the Fed will raise rates twice in 2017: in June and December. But there is a chance for a third increase. If economic indicators remain strong, analysts of the bank will receive more information about the economy of Trump, as then they do not exclude the possibility of an increase in interest rates in May.

The Nikkei fell due Trump policy

Japanese stocks fell on Tuesday, as the protectionist stance of US President Donald Trump on trade has excited investors, while the bonds of the banks showed the worst dynamics due to falling profitability of US and global government bonds.
Nikkei fell by 0.6 percent to 18.787,99 points, the broader Topix index slowed by 0.6 percent, ending trading at 1.506,33 points.
Banking shares have lost 2.3 percent, showing the worst dynamics among the sub-indices on the Tokyo Stock Exchange. Shares of exporters also declined due to the strengthening of the yen, which is close to a two-month peaks.

HSBC: Gold could rise to $1,500 an ounce if Trump wins the elections

The price of gold could rise to 1,500 dollars an ounce by the end of 2016 if Donald Trump wins the presidential election in the United States, analysts from HSBC said. On Tuesday there was published a poll, which shows that Trump for the first time since May, was pulled over Hillary Clinton. According to the study the candidate for US president Donald Trump is ahead of Hillary Clinton by 1%.
US presidential election will be held on 8 November. Gold is growing rapidly, adding 0.88 percent to 1288 dollars per ounce, analysts reported. Trump victory will undoubtedly contribute to the growth of quotations of gold since the policy of trade protectionism to which he adheres, will put pressure on the growth rate of the US economy, they added.