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With not a lot of data releases, Asian session traders took cues from Friday’s U.S. session trading.

  • Australian markets closed for Queen’s birthday celebrations
  • Japan’s core machinery orders plunges by 3.1% vs. 0.6% uptick expected, 1.4% previous
  • Japan’s PPI (y/y) up by 2.1% vs. 2.2% expected, 2.1% previous
  • Japan’s preliminary machine tool orders (y/y) down from 34.7% to 24.4% in May

Major Events/Reports

Extended risk aversion

With not a lot of data on the docket, Asian session traders took their cues from last Friday’s U.S. session trading. In case you missed it, you should know that technology shares dragged the U.S. indices lower and inspired a bit of profit-taking across the board.

Nikkei followed suit today, led by drops in technology shares such as South Korea’s Samsung Electronics, Taiwan Semiconductor Manufacturing Co, and Japan’s Sharp Corp falling by 1.6% – 2.7%.

  • Nikkei is down by 0.52% to 19,908.60,
  • Hang Seng is down by 1.19% to 25,721.7
  • Shanghai index is down by 0.58% to 3,140.135

Cautiousness ahead of this week’s events

Aside from poor performance in the equities markets, high-yielding currencies were also weighed down by uncertainty ahead of this week’s major events.

The Fed’s policy decision on Wednesday comes to mind. With market players all but expecting a rate hike from Janet Yellen and her friends, attention will be on whether or not they will be hawkish enough to hint of another rate hike in September or even in December.

It also doesn’t help that Theresa May is now scrambling to form a government after the disastrous elections for her Conservative Party.

Reuters has provided a schedule for the beleaguered Prime Minister and you can bet your pips that traders will be watching for developments and their potential impact on Britain’s official stance in the Brexit negotiations.

Major Market Mover(s):

GBP

The pound snagged a couple more pips against its major counterparts as Asian session traders caught up to the profit-taking seen in the hours after the hung Parliament announcement last week.

GBP/USD inched 43 pips higher (+0.34%) to 1.2759, EUR/GBP id down by 32 pips (-0.36%) to .8783, GBP/JPY is up by 39 pips (+0.28%) to 140.70, and GBP/CHF is up by 35 pips (+0.28%) to 1.2360.

JPY

A bit of risk aversion pushed the low-yielding yen higher even though Japan printed a couple of weak low-tier economic data.

USD/JPY is down by 5 pips (-0.05%) to 110.28, EUR/JPY inched 11 pips (-0.09%) lower to 123.57, and AUD/JPY slid by 11 pips (-0.13%) to 82.99.

Watch Out For:

  • 8:00 am GMT: Italian industrial production (0.2% expected, 0.4% previous)
  • 8:30 am GMT: RBA Assistant Governor Debelle to speak in Hong Kong at the Global FX Code of Conduct launch