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Risk-taking was the name of the game during the Asian session as traders priced in a strong U.S. NFP report.

The pound had a rocky start, however, after Brexit Minister David Davis and two other ministers handed their resignation in a blow to PM Theresa May.

  • Japan’s bank lending (y/y) up by 2.2% vs. 2.0% growth expected, 2.0% previous
  • Japan’s current account surplus tightens from 1.89T JPY to 1.85T JPY in May
  • Gov. Kuroda: BOJ will stick to easy policies until inflation rises to target range
  • Japan’s Economy Watchers sentiment up from 47.1 to 48.1 in June

Major Events/Reports:

Brexit Minister David Davis steps down

Britain’s official Brexit negotiator David Davis, his Deputy Steve Baker, and minister Suella Braverman have decided to step down from their roles over the weekend.

The move came two days after Prime Minister Theresa May’s Cabinet signed off on her Brexit plans that had the U.K. maintaining its tight links to the EU bloc for goods trading but breaking free on services.

In his resignation letter, Davis criticized May’s plan, saying that it would leave Parliament with “at best a weak negotiating position” and implied that it could lead to more demands from Brussels down the road.

Number 10 is set to release a 100-page summary on the details of the plan some time this week. In addition, May is also expected to reshuffle her Cabinet as early as today.

Sterling opened the week with weekend gaps, but eventually recovered most of its losses on the back of risk appetite.

Traders start the week with risk-taking

Asian session market players mostly shrugged off headlines over the weekend in favor of taking on higher-yielding bets.

One possible reason is that the sky hasn’t fallen after the U.S.’ tariffs on China’s goods has taken effect. Of course, it also didn’t hurt that Uncle Sam’s NFP report printed better-than-expected results last Friday, and supported the Fed’s hawkish bias.

  • Nikkei is up by 1.43% to 22,099.6
  • A SX 200 is down by 0.17% to 6,294.2
  • Hang Seng is up by 1.50% to 28,740.1
  • Shanghai index is up by 1.65% to 2,792.570

Even commodity prices jumped on the bullish bandwagon with gold taking advantage of a bit of dollar weakness.

  • Gold is up by 0.36% to $1,259.17
  • Brent crude oil is up by 0.49% to $77.48
  • U.S. WTI is up by 0.28% to $74.08

Major Market Mover(s):

AUD

Aussie bulls were the most aggressive during the session, as they took advantage of higher copper prices and the overall risk appetite in the markets.

AUD/USD is up by 33 pips (+0.45%) to .7461; AUD/JPY is up by 37 pips (+0.38%) to .9760; EUR/AUD is down by 38 pips (-0.24%) to 1.5766; GBP/AUD is down by 59 pips (-0.33%) to 1.7822, and AUD/NZD is up by 45 pips (+0.42%) to 1.0906.

USD

The Greenback took a step back across the board as traders flocked to higher-yielding currencies.

EUR/USD is up by 22 pips (+0.19%) to 1.1764; GBP/USD is up by 13 pips (+0.10%) to 1.3299; USD/CHF is down by 15 pips (-0.15%) to .9883, and USD/CAD is down by 8 pips (-0.06%) to 1.308.

Watch Out For:

  • 6:45 am GMT: Switzerland’s unemployment rate (2.5% expected, 2.6% previous)
  • 7:00 am GMT: Germany’s trade balance (20.3B EUR expected, 19.4B EUR previous)
  • 8:50 am GMT: MPC member Ben Broadbent to give a speech in London
  • 9:30 am GMT: Sentix investor confidence (9.0 expected, 9.3 previous)