Emerging market currencies are sharply declining

Trump's latest measures to deepen protectionism have triggered further sell-offs in emerging markets.
The currencies and indices of emerging markets are turning to their biggest losses since September 2015. The Hungarian forint has fallen to a historic bottom after the country's central bank has confirmed its not particularly aggressive monetary policy.
Yuan fell on Thursday for the tenth consecutive day against the dollar, which was his longest series of declines since March of 2014.
A cheap yuan is part of China's policy to resist US blows in the ever-worsening trade war between the two super-economic powers.
Chinese yuan is cheaper also because the central bank of China refrains from raising interest rates after the Fed raised interest rates by 25 basis points.

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.

Copper - the first victim of the trade war between the US and China?

Last week, the most serious sale took place in two years, as investors were increasingly concerned about the prospects for a trade war. After this sale, the metals seem to have calmed down. However, copper along with other non-noble metals fell again at the auction in Shanghai this week.
This decline seems to have occurred because of the events of Friday. China finally responded to Trump's tariffs referring to section 232 on steel and aluminum imports, announcing plans to introduce reverse tariffs of up to $3 billion on US goods, including seamless steel pipes and aluminum scrap, which threatens to slow global economic growth.
After this announcement, the price of copper fell 1.15%, and non-precious metals showed the worst weekly decline since early February. Quotes fell below the level of the September consolidation, breaking the level of the 200-period moving average, signaling a target at 2.83.

Oil rally may be short-term?

Another good week for oil after the OPEC Secretary predicted global oil consumption growth to over 100 million barrels per day by 2020. Mohamed Barkindo's statement was widely welcomed by oil investors.
Investors are now beginning to ask - is the oil rally justified and how far could the price of black gold go?
The market knows that OPEC's positive comments and forecasts often are rapidly being overcomed. Especially in cases where net long positions of investors rise to high levels, as currently the case is.
Investors are aware that any forecasts coming from OPEC should be taken with a great portion of mistrust. In the end, they come from a party that is interested in a high oil price and can be manipulated.
Some experts start to worry that the price of oil has risen too much and too fast. Not only the planned repairs of US refineries expected to bring downward pressure on raw material prices, but also the number of shale growers is rising as a result of the rise in oil prices.
Oil demand from China may also fall below expectations, which is another factor to lower the price of oil.
On the other hand, the unprecedented warming of relations between Russia and Opec may be a factor that will continue to support the cost of the raw material. What will happen from now on is yet to be seen.

Beijing promises further internationalization of the yuan and a free trade

China will continue to promote the internationalization of the renminbi, as well as free trade and investment, Vice Chairman of the People's Bank of China Fan Yifei said on Thursday.
The head of the regulator is sure that achieving sustainable economic growth and maintaining financial stability will create a good basis for the internationalization of the renminbi, the Central Bank's website said.
However, the process will be long, and the decisive role will be played by market forces, he said at a conference in Sydney.
The head of the central bank of Australia, Philip Lowe, on Thursday commented on the statement of the Chinese colleague, calling the internationalization of the yuan entailing significant consequences for the global financial system.
Fears of further weakening of the yuan and slowing the world's second largest economy prompted investors to withdraw funds abroad. In response, at the end of 2016 and early 2017, Beijing imposed restrictions on capital outflow, which influenced the pace of internationalization of the national currency. However, the weakening pressure of capital outflow helped to stabilize the yuan this year, while the country's foreign exchange reserves again exceeded the key $3 trillion mark.

China and Risk Off

For a long time, the Chinese economy is not mentioned in the world's main lobby, which publish the first negative signals for the dynamics of financial markets. Neither GDP growth nor the last publication on inflation, no data on the index of business activity are a factor for adverse movement of risk assets.
Many financial market participants are talking about the upcoming US presidential elections, raising the Fed's rates, Bank of Japan's decision on the new incentive program, Brexit and so on. The existence of a major player in the current global market - China, all forgotten. As a rule, unexpected negative news can cause large fluctuations in the financial markets. Chinese "miracle" last August is still fresh in the memory, when global trade demonstrated aggressive drop in prices down. A similar situation was in the beginning of this year, and once again the reason was the Celestial Empire.