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With no fresh catalysts to change intraweek trends, trade war jitters continued to dictate price action during the Asian session.

  • Australia prints 1.87B AUD trade surplus vs. 0.91B AUD expected, 0.73B AUD previous
  • Trade war jitters continue to weigh on risk-taking

Major Events/Reports:

Australia’s trade data

Data from the Land Down Under showed a wider-than-expected trade surplus in June.

Australia clocked in a 1.87B AUD surplus for the month, 158% higher than May’s downwardly revised 0.73B AUD figure and marks the widest surplus in THIRTEEN months. Wowza!

Apparently, exports shot up by 2.6% to an all-time high of 36.44B AUD thanks to a pick-up in a broad range of goods including gold, iron ore, and manufactured items.

Meanwhile, imports slipped by 0.7% as a pullback in oil prices outweighed upticks in transport and telecoms equipment.

Not everyone is impressed, however. Analysts point out that nominal exports and imports grew by almost the same pace in Q2 2018 and are unlikely to contribute much to the GDP reading.

Trade war jitters

What’s another trading week without trade war-related headlines?

As mentioned in the U.S. session recap, Trade Representative Robert Lighthizer pretty much confirmed the government’s plans to increase tariffs on $200B worth of Chinese imports to pressure China to “change its harmful policies and behavior.”

The headline was nothing new, but the confirmation sure spooked traders out of higher-yielding bets.

  • Nikkei is down by 1.22% to 22,468.3
  • A SX 200 is down by 0.27% to 6,238.5
  • Shanghai index is down by 2.45% to 2,755.218
  • Hang Seng is down by 2.32% 27,683.0

Risk aversion finally outweighed dollar strength and pushed gold prices higher, while oil prices steadied a bit after receiving support from the previous trading session.

  • Gold is up by 0.28% to $1,219.26
  • Brent crude oil is steady at $72.56
  • U.S. WTI is down by 0.06% to $67.79

Major Market Mover(s):


Aussie traders shrugged off a stronger-than-expected trade data from Australia to price in lower iron ore prices and jitters over the U.S.-China trade war.

AUD/USD is down by 21 pips (-0.28%) to .7383; AUD/JPY is down by 36 pips (-0.44%) to 82.35; AUD/CHF is down by 16 pips (-0.22%) to .7329; AUD/CAD is down by 21 pips (-0.22%) to .9606; EUR/AUD is up by 35 pips (+0.22%) to 1.5781, and GBP/AUD is up by 23 pips (+0.13%) to 1.7749.


The low-yielding yen found support amidst a risk-averse trading environment.

Of course, it also helped that the Bank of Japan (BOJ) conduct operations even after the 10-year JGB yields hit its highest levels in more than two years. The (lack of) reaction came after the central bank already acknowledged that “yields may move upward and downward to some extent” in its latest policy statement.

USD/JPY is down by 16 pips (-0.15%) to 111.55; EUR/JPY is down by 30 pips (-0.23%) to 129.97; GBP/JPY is down by 45 pips (-0.30%) to 146.18; CHF/JPY is down by 24 pips (-0.22%) to 112.36, and NZD/JPY is down by 20 pips (-0.27%) to 75.65.

Watch Out For:

  • 5:45 am GMT: Switzerland’s SECO consumer climate (2 expected and previous)
  • 7:00 am GMT: Spain’s unemployment change (-87.6K expected, -90.0K previous)
  • 7:00 am GMT: Spain’s unemployment change (-87.6K expected, -90.0K previous)
  • 7:30 am GMT: Switzerland’s manufacturing PMI (60.8 expected, 61.6 previous)
  • 8:30 am GMT: U.K.’s construction PMI (52.8 expected, 53.1 previous)
  • 9:00 am GMT: Euro Zone’s PPI (0.3% expected, 0.8% previous)
  • 11:00 am GMT: BOE’s monetary policy decision. Read our mini trading guide if you’re trading the event!
  • 11:30 am GMT: BOE Governor Carney to give a speech