Most markets, including the precious metals, were relatively quiet on Friday morning. Spot gold moved ever so slightly into positive territory, trading close to a three-week low at about $1,255/oz. The Platinum Group Metals were also flat in early trading, while spot silver similarly moved just 6¢ this morning, falling to $16.67/oz.
Muted Market Reaction
Stocks in Europe were higher across the board as economic conditions gradually improve in the eurozone. Many investors are encouraged by the partnership being fostered by newly elected French President Macron and his German counterpart, Chancellor Merkel. France and Germany are the two biggest economies in the region. The continent is still in the grips of various political challenges, however, the Brexit negotiations being chief among them. There has been some speculation that these strengthening ties could open the door for the U.K. to walk back its departure from the European Union, an idea suggested both by Macron and German Finance Minister Wolfgang Schäuble. However, this is likely an implausible outcome for the British.
Elsewhere in Europe, it appears that Greece has accepted a fourth round of bailout funds from the EU, and this time the International Monetary Fund (IMF) has joined in the assistance. As has been a recurring theme, the fresh line of credit will simply help the indebted Greek government to cover its obligations for now—essentially, just buying time—while a broader solution is sought with its European creditors. One proposal is to extend the maturity dates of its loans as a form of debt relief.
Asian markets were mixed overnight, with Japan’s Nikkei 225 adding more than 0.5% while the Shanghai Composite dropped 0.3%. The yen slipped to a new two-week low after the Bank of Japan decided not to make any changes to its monetary policy. This helped lift the dollar initially, but the USD was down about 0.1% on the DXY index this morning to 97.3.
Crude oil prices recently hit a seven-month low but were rebounding on Friday. WTI crude and Brent crude each gained about 1%, yet still traded below $45 and $50 per barrel, respectively.
In other economic data, housing starts in the U.S. tumbled 5.5% in May according to Department of Commerce. Markets showed little reaction to the news. The same was true of the unexpected drop in weekly jobless claims, as reported by the Department of Labor. U.S. stock indices were each down modestly during early trading on Friday.
In corporate news, giant retailer Amazon is set to acquire the popular Whole Foods Market in a deal reportedly worth $13.7 billion. This adds to the company’s growing portfolio of acquisitions in order to put pressure on its main competitors, such as Wal-Mart. Interestingly enough, as Amazon seeks to encroach on Wal-Mart’s grocery business, the world’s largest chain of superstores is responding in kind, scooping up a clothing company for $310 million.
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