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With not a lot of catalysts during the Asian session, forex traders concentrated on weekend headlines instead.

  • Chinese markets out on Dragon Boat Festival holiday

Major Events/Reports:

GBP retraces from last week’s losses

The pound gained against its major counterparts despite new election polls supporting a narrowing lead for Theresa May’s Conservative Party.

Remember that last Thursday the pound took a beating when YouGov published its report reflecting the Tories’ lead narrowing down to five points.

Last Saturday pollsters Opinium and ComRes published their own results, which reflect the first surveys since the Manchester attack last week.

Opinium showed May’s lead slipping from 13 to 10 points (Conservative’s 45% against Labour’s 35%)from a week earlier, while ComRes said that the Conservative Party’s lead had dwindled from 18 to 12 points (Conservative’s 46% against Labour’s 34%).

The pound mostly shrugged off the news possibly because, aside from the polls still showing a victory for May, they also hint that the voters’ opinions were influenced by the Manchester attack.

It also doesn’t hurt that U.K.’s banks will be out on a holiday today, which might have encouraged a bit of profit-taking from last week’s moves.

North Korea fires another ballistic missile

A few hours ago North Korea appeared to have fired a short-range ballistic missile that travelled 450 km at an altitude of 120 km for about six minutes before it landed on Japan’s economic zone, about 300 km off of Japan’s coastline.

Yoshihide Suga, Japan’s chief cabinet secretary, said that North Korea’s missile launches are “highly problematic from the perspective of the safety of shipping and air traffic and is a clear violation of United Nations Security Council resolutions.

Japanese PM Shinzo Abe was quick to respond, saying that “Working with the United States, we will take specific action to deter North Korea,” adding that “We will maintain high vigilance in coordination with South Korea and the international community.

South Korea’s Joint Chiefs of Staff (JCS) issued their own threats, saying that “North Korea’s continuous provocative actions will cause its own isolation and it will be facing strong punishment from our military, South Korea and US alliance and the international community.

The launch marks North Korea’s 12th missile since the start of the year, which is 2 more than the 10 it had launched around the same time last year.

Much like the U.K.’s new election polls though, market players have mostly shrugged off the news.

Instead, the equities markets followed last week’s trends with Nikkei and Hang Seng rising by another 0.14% while Australia’s A SX 200 slipped by 0.48%.

Major Market Mover(s):

GBP

The pound might have gapped lower against its major counterparts, but it soon went on an intraday uptrend despite the lack of major catalysts.

GBP/USD is up by 13 pips (+0.10%) to 1.2819, GBP/JPY is up by 23 pips (+0.16%) to 142.73, and EUR/GBP is down by 19 pips (-0.22%) to .8709.

JPY

Whether it’s concern over the yen’s vulnerability to North Korea’s missile attacks or risk-taking across the board, the yen took hits against its major counterparts.

USD/JPY popped up by 7 pips (+0.06%) to 111.33, AUD/JPY hit a high of 82.96 before sliding back down to 82.82, while NZD/JPY gained 22 pips (+0.28%) to 78.66.

Watch Out For:

  • U.K. banks out on Spring Bank holiday
  • No major economic reports on tap during the London session