CGTN Europe interviewed iona Cincotta, Analyst, City Index
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00:00down to rate decisions and how much to the threat of tariffs?
00:05Yes, so you know I think we did see a rally in the US stock markets yesterday
00:09and a lot of that
00:12was down to what we heard
00:16Federal Reserve Chair Jerome Powell
00:20saying as far as the the outlook of
00:28well the uncertainty he mentioned but I think
00:32I think the the fact that the Fed was sticking with the the two
00:35expected rate cuts this year really did give a bit of a boost
00:39to the markets which have fallen really sharply over the past couple of weeks
00:43now we've seen the Nasdaq down over 10 percent from its recent
00:47record high the S&P as well but we have seen a little bit of a
00:50recovery as I said yesterday we're seeing that slight recovery again today
00:55but it does look like it's potentially losing a bit of steam and the reason for
00:59that is because those concerns over Trump's trade tariffs remain you know
01:04the Federal Reserve really highlighted the
01:07level of uncertainty that there is regarding the outlook
01:12with the outlook because of Trump's
01:15trade tariffs and that is being reflected in the
01:17market so I think in order really for the markets to really push higher and
01:21for sentiment to improve we would probably need
01:28to see a pivot either from President Trump
01:33or from the Federal Reserve and we're not seeing either of those
01:40right just now. So on
01:44uncertainty you mentioned it twice we're hearing a lot of that word aren't we is
01:48that why gold has hit a record high? Exactly you know gold it's the safe
01:54haven asset of choice it's the asset that
01:58investors tend to buy into when they're concerned
02:01about the geopolitical outlook about the economic outlook
02:05because it tends to perform well in those uncertain
02:09times and as a result we've seen investors drive into
02:13dive into the precious metal pushing it up to
02:16over $3,050 the ounce as it's sort of you know has seen record
02:22high after record high this year it's up over 15%
02:25so far this year alone so very strong rally in gold
02:29also the fact that we've seen a weaker US dollar that also helps gold which is
02:33a denominator in US dollars so when there's a weaker
02:40US dollar that does make gold
02:45more or rise as well. Well let's talk about that US
02:52dollar because it's near five
02:56month lows at the moment isn't it why is that what's going on?
03:00Yeah so that's really interesting because what we're seeing here is this
03:03sort of sellout for of US assets so we've seen it not
03:07only in the US equities market which as I
03:10said you know we've seen fall very sharply over the past few weeks
03:13but we've also seen that sell-off in the US dollar and that's quite unusual to
03:17see the sell-off in US equities and US
03:19dollar at the same time because the US dollar is also considered a safe haven
03:24but because of these trump tariff concerns because of fears over the
03:28economic outlook for the US and the prospect of a slowdown
03:32that's actually weighed on the US dollar at the same time you know we've got the
03:37Bank of Japan for example talking about potential rate hikes
03:40we've got Europe starting to look a little bit more
03:44encouraging as far as far as an investment
03:48opportunity is concerned so we're seeing
03:52relocation as well away from the US dollar towards
04:00other currencies such as the
04:04the euro or the Japanese yen.
04:08Fiona good to talk to you thanks again for joining us on the program that's
04:11Fiona Sincotta from City Index. Thank you.
04:15The Bank of England has kept interest rates on hold
04:18warning of global uncertainty. The decision to keep the base rate at four
04:22and a half percent was widely expected although the bank's governor Andrew
04:25Bailey insists it remains on a gradually declining path. Economists are predicting
04:31two more cuts by the end of the year.
04:38Ukraine's President Volodymyr Zelensky says Europe must be part of diplomatic
04:48efforts to end the conflict with Russia. He made his comments as he addressed a
04:53European summit in Brussels where leaders have been discussing ceasefire
04:57efforts further support for Kyiv and bolstering
05:04European defense.
05:08Zelensky briefed them on his phone call with
05:12Donald Trump and accused Russian President Vladimir Putin of being
05:20responsible for the continued fighting. Our teams will also work towards
05:26achieving