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A lack of top-tier economic events led traders to price in their concerns over escalating trade tensions between the U.S. and China.

Meanwhile, the euro got kicked lower ahead of Draghi’s scheduled speech and the Loonie recovered some of its losses ahead of this week’s OPEC meetings.

  • China’s markets out on Dragon Boat Festival holiday
  • U.K. Rightmove house price index down from 0.8% to 0.4% in June
  • Japan prints surprise trade deficit in May
  • Earthquake reported in Osaka prefecture

Major Events/Reports:

Overall risk aversion

With not a lot of fresh catalysts to price in, Asian session market players focused on escalating trade tensions between the two largest economies of the world.

See, the Trump administration slapped an additional $50 billion worth of tariffs on about 800 strategic Chinese goods, which prompted Beijing to threaten 25% tariffs on 659 U.S. products including soybeans, autos, seafood AND crude oil. Duhn duhn duhn.

While the trade war is bad enough, analysts are also concerned that the U.S.’ aggressiveness could spill over to its other key trade allies, which could really fire up the global trade war.

Not surprisingly, the Asian bourses started the week on a weak note.

  • Nikkei is down by 0.95% to 22,635.8
  • A SX 200 is up by 0.19% to 6,109.6
  • Hang Seng is down by 0.43% to 30,309.5
  • Shanghai index is down by 0.73% to 3,021.901

Commodities also reflected the overall risk aversion, with oil prices getting a second hit from profit-taking ahead of this week’s OPEC summit in Vienna.

  • Gold is up by 0.13% to $1,280.13
  • Brent crude oil is down by 0.55% to $72.64
  • U.S. WTI is down by 0.67% to $63.81

Major Market Mover(s):

EUR

The common currency lost ground ahead of Draghi’s speech scheduled at 5:30 pm GMT today, where analysts believe the ECB Governor could reiterate that interest rates will stay low until the end of 2019.

EUR/USD is down by 15 pips (-0.13%) to 1.1591
EUR/JPY is down by 38 pips (-0.30%) to 128.04
EUR/AUD is down by 20 pips (-0.13%) to 1.5570
EUR/CAD is down by 44 pips (-0.29%) to 1.5279

JPY

A bit of risk aversion and an earthquake in the Osaka prefecture nudged the low-yielding yen higher during the Asian session.

USD/JPY is down by 18 pips (-0.16%) to 110.46
GBP/JPY is down by 31 pips (-0.21%) to 146.58
NZD/JPY is down by 9 pips (-0.11%) to 76.67

CAD

Though oil prices slipped lower, the Loonie managed to gain pips against its major counterparts. One possible explanation is traders already taking profits from their shorts ahead of this week’s OPEC summit in Vienna.

USD/CAD is down by 21 pips (-0.16%) to 1.3182
CAD/JPY is up by 3 pips (+0.03%) to 83.80
GBP/CAD is down by 36 pips (-0.20%) to 1.7491
NZD/CAD is down by 17 pips (-0.19%) to .9149

Watch Out For:

  • 9:00 am GMT: Italy’s trade balance (3.21B EUR expected, 4.53B EUR previous)
  • 10:00 am GMT: German Bundesbank monthly report