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Traders shrugged off Wall Street’s weak Friday performance and pushed high-yielding currencies higher despite a lack of catalysts.

  • NZ Westpac consumer sentiment up from 111.9 to 113.4
  • U.K. Rightmove house price index down by 0.4% vs. 1.2% uptick in May
  • Japan’s trade surplus narrows down to 0.13T JPY vs. 0.35T surplus expected, 0.16T previous
  • AU new motor vehicle sales up by 2.9% vs. 0.6% increase in April
  • Macron’s party set to win majority in latest elections

Major Events/Reports:

Japan’s trade data

Headline trade data from the world’s third largest economy might have missed market estimates, but details sure made up for the disappointment!

Japan printed a trade deficit of 203.4B JPY, which is worse than the expected 76.0B JPY surplus expected and the 47.4B JPY deficit a year earlier. If you adjust for seasonality, this translates to a surplus of 133.8B JPY against the expected 43.3B JPY surplus and April’s 481.1B JPY figure.

A closer look, however, tells us that Japan’s trade activities are still promising. Exports jumped by an annualized rate of 14.9% – the fastest since January 2015 – thanks to healthier shipments of cars and steel. In volume terms, exports rose by 7.5% from a year ago, which still marks the fastest gain in three months.

Meanwhile, imports rose by an annualized rate of 17.8% against estimates of a 14.8% uptick and last month’s 15.1% gain, as higher oil prices pushed import prices higher. It also marked the fastest pace since early 2014.

Overall, Japan’s trade numbers reflect a recovery from an earthquake in Kumamoto last year, as well as increasing demand for cars and car parts due to higher overseas demand.

Overall risk appetite

Asian session traders mostly shrugged off weak Wall Street’s weak performance last Friday as they brace themselves for the week ahead.

With the major central bank announcements out of the way, traders are now focusing on a relatively upbeat global growth outlook.

Of course, it also didn’t hurt risk appetite that the pound has shrugged off another (possible) terrorist attack in London and that Emmanuel Macron’s party is slated to win majority in France’s latest elections.

  • Nikkei is up by 0.60% to 20,062.50,
  • Australia’s A SX 200 is up by 0.33% to 5,793.20,
  • Shanghai index is up by 1.04% to 11,089.90, and
  • Hang Seng is up by 0.99% to 25,879.00

Major Market Mover(s):

JPY

Risk appetite and a headline miss in Japan’s trade data weighed on the low-yielding currency.

USD/JPY is up by 15 pips (+0.14%) to 111.04, EUR/JPY is up by 3 pips (+0.02%) to 124.34, and CHF/JPY is up by 11 pips (+0.10%) to 114.06.

Comdolls

The Asian markets’ risk-taking vibes turned out pretty well for the higher-yielding currencies. Higher oil prices boosted CAD further, while RBA Governor Lowe saying that the economy would grow “a bit faster” in the coming years waved a red flag to Aussie bulls.

Last but not the least is the Kiwi, which likely got a boost from positioning ahead of the RBNZ’s statement scheduled this week.

AUD/USD is up by 3 pips (+0.04%) to.7622, AUD/JPY is up by 13 pips (+0.15%) to 84.62, and USD/CAD is down by 7 pips (+0.08%) to 84.00.

Meanwhile, NZD/USD is up by 27 pips (+0.37%) to .7281 and NZD/JPY is up by 41 pips (+0.51%) to 80.85.

Watch Out For:

  • No major economic release on tap. Make sure you’ve marked your chart levels on the majors, comdolls, and crosses, though!