US Dollar Mired In Range; US Yields Breakdown May Boost Gold Prices

The US Dollar (via the DXY Index) is heading lower once again in what may be a weak finish to a disappointing week. US equity markets are pointing slightly higher on the morning, but US Treasury yields continue to soften, helping pave the way for a rebound in Gold and Silver prices. Meanwhile, it’s a quad witching Friday, a useful reminder that recent equity market moves may be driven by expiries of key options and futures contracts; once we’re through the ides of March, sentiment may rapidly change.

US-CHINA TRADE TALKS AT IMPASSE

As of yesterday, we finished another cycle in the US-China trade war negotiations, with no deal coming to fruition. Sitting at the current impasse, we’re looking for signs that the cycle will start anew with fresh rhetoric that a deal could be reached in the coming weeks. The first such sign of a potential positive turn in sentiment may be coming from China, where the National People’s Congress just passed a law that will specific issues the international community has raised (like intellectual property sharing).

But given that the law is largely symbolic, it seems unlikely that US trade negotiators will see this as a measure considered concrete enough to finally schedule the long-awaited meeting between US President Donald Trump and Chinese President Xi Jinping.

WILL UK PM MAY GET HER DEAL APPROVED AFTER ALL?

The latest Brexit updates coming across the news wire seem to indicate that UK Prime Minister Theresa May is not done trying to get her deal passed through UK parliament. The EU-UK Withdrawal Agreement remains, as she feels, the best option there is to deliver Brexit by the originally-intended March 29 deadline. Reports today indicate that PM May is whipping votes among the Northern Ireland DUP, whose support is absolutely necessary in order to see her agreement ratified by lawmakers. Whether or not DUP approval of PM May’s deal would be enough to convince other Euroskeptic Brexiteers to come around with their support is another question altogether.

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