The market mood soured this afternoon after the International Monetary Fund (IMF) cut its global economic growth projections for 2019 to 3.3% from 3.5%.

Risks revolving around US-China trade talks and Brexit have played a leading role in the IMF’s decision to downgrading growth forecasts to the lowest since the financial crisis in 2008. Although the narrative over decelerating world growth remains an ongoing theme, the IMF’s recent downgrade will certainly test investor risk appetite as the trading week progresses.

A key takeaway from the IMF report was the fact that growth from the largest economy in the world was predicted to cool from 2.5% to 2.3% this year. Interestingly though, China growth was raised to 6.3% from 6.2%. 

All in all, we expect concerns over slowing global growth to add to the basket of themes fuelling appetite for safe-haven assets like the Japanese Yen and Gold this quarter. With Gold prices already breaking above the psychological $1300 level, a daily close above this point has the potential to send prices towards $1324 as discussed earlier this morning.

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