The euro was mainly flat Tuesday as the UAE came under attack and the US sank Iranian boats in the Strait of Hormuz. Trump said he would increase tariffs charged to the EU for cars and trucks to 25%.
A White House official said in a statement Friday that the EU has "failed to make substantial progress on their agreed-upon commitments" under a trade agreement between the countries.
The euro zone economy expanded by a meagre 0.1% in Q1, while inflation rate jumped to 3% In April. Economists fear Europe could be facing a period of stagflation amid rising energy costs.
One silver lining is that core inflation cooled to 2.2%, signalling that the so-called second-round effects are yet to emerge. Euro zone firms still expect inflation to steady in the long term.
The US GDP grew at a 2% seasonally adjusted annualized pace despite a seeming surge in spending on AI. The boost from larger tax refunds is expected to fade soon, leading to weaker spending this year.
The core PCE price index hit 3.2% in March., while the headline reading posted the biggest gain in nearly 3 years. The report indicated that the bulk of the price pressure came from goods.
The single currency stayed in a descending trendline, which reinforced its bearish bias. We see it retest the recent low at $1.1655, unless a breakthrough in peace negotiation occurs.
Asset recap
As of market close on 4 May, among EBC major products, Micron Technology shares led gains as investors piled into names seen benefitting from AI data centre demand.
US transportation stocks plunged after Amazon announced expanded logistics offerings that will turn it into a major competitor for parcel carriers and air freight companies.
Crude prices surged again after Iran's Fars News Agency reported a US warship attempting to pass through the Strait of Hormuz was targeted and hit by two missiles after it ignored Iran's warnings.
EBC Financial Group Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC Global Financial Collaboration or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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