A pretty quiet start of the week for Asian session market players, as traders stay in the sidelines ahead of this week’s potential catalysts.
- U.K.’s house price index slips by 2.3% vs. 0.1% decline in July
Mixed bag of weekend updates
There were no economic bombshells to kick off the trading week, so traders only had a couple of lower-tier weekend headlines to keep them going.
The Turkish lira, for example, managed to maintain the $6 handle after Qatar and the Turkey’s central banks signed a $15-billion currency swap agreement to provide liquidity and support financial stability last Friday.
The Chinese markets were also a bit more chill today thanks to optimism over the upcoming meetings between U.S. and Chinese trade representatives before the U.S. triggers another round of additional tariffs on Chinese goods this August 23.
It might have also helped that the People’s Bank of China (PBoC) encouraged local banks to “support infrastructure projects and companies facing ‘temporary difficulties’” over the weekend. The central bank set the USD/CNY mid-point rate at 6.8718, a tad stronger than the 6.8894 fix we saw last Friday.
But not everything was stars and unicorns. Australian PM Turnbull, for example, is dealing with doubts over his popularity among his peers.
Meanwhile, talks of Italy’s populist government using last week’s Genoa bridge collapse to “ignore EU controls” in budget rules is making investors skittish.
Recall that the Five Star Movement-Lega coalition is planning on increasing infrastructure investment to help boost the economy, something that grates against the EU’s budget rules.
However, an article from The Telegraph suggested that the coalition is planning to invoke the “Golden Rule” that would remove chunks of public investment from the headline budget deficit and low key go around the EU’s rules. Uh-oh.
- Nikkei is down by 0.31% to 22,201.2
- A SX 200 is down by 0.31% to 6,348.5
- Shanghai index is up by 0.11% to 2,671.929
- Hang Seng is up by 0.90% to 27457.7
Commodity prices didn’t fare much better, with gold prices barely moving and oil prices all over the place on speculations that major oil players are starting to turn bearish on the high-yielding commodity.
- Gold is down by 0.03% to $1,186.00 per troy ounce
- Brent crude oil is down by 0.25% to $71.58 per barrel
- U.S. WTI is up by 0.14% to $65.65 per barrel
Major Market Mover(s):
Brexit and Italian budget headlines over the weekend spooked some of those who have higher-yielding European investments, so they turned to the low-yielding franc for support.
EUR/CHF is down by 20 pips (-0.18%) to 1.1368; CHF/JPY is up by 28 pips (+0.25%) to 111.18; GBP/CHF is down by 15 pips (-0.11%) to 1.2677, and AUD/CHF is down by 12 pips (-0.16%) to .7270.
There were no headlines to drag on the Kiwi specifically. However, the comdoll might have taken more hits from political uncertainty in Australia as the Aussie found support from a stronger yuan today.
NZD/USD is down by 11 pips (-0.17%) to .6623; NZD/JPY is down by 7 pips (-0.09%) to 72.23; NZD/CAD is down by 16 pips (-0.18%) to .8649; AUD/NZD is up by 17 pips (+0.15%) to 1.1038; EUR/NZD is up by 24 pips (+0.14%) to 1.7259, and GBP/NZD is up by 38 pips (+0.20%) to 1.9247.
Watch Out For:
- 6:00 am GMT: Germany’s PPI (0.4% expected, 0.3% previous)
- 10:00 am GMT: Germany’s Bundesbank monthly report