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Asian markets had a quiet start to the week, but traders are concerned over events that could unfold over the next couple of days.

  • Japan’s markets out on Respect for the Aged Day holiday
  • U.K.’s Rightmove house price index (0.7% expected, -2.3% previous)
  • Trump to announce new tariffs on Monday?

Major Events/Reports:

U.S.-China trade war to escalate?

The Wall Street Journal was under the spotlight today as traders cited the newspaper for several key rumors.

First is a report published over the weekend that cited an unnamed senior administration official saying that Trump could announce the additional tariffs on another $200 billion worth of Chinese goods as early as Monday.

And as if that’s not explosive enough, WSJ also quoted Chinese officials who revealed that talks between Vice Premier Liu He and Treasury Secretary Steven Mnuchin (and maybe even Trump) could get nixed once the POTUS announces his next round of tariffs.

Not surprisingly, the possibility of further escalation in the U.S.-China trade war kept a lot of traders in the sidelines, if not liquidating their higher-yielding bets.

Mixed trading session

With Japan’s markets out on a holiday; China and Hong Kong’s markets still subdued after the weekend’s typhoon, and traders staying in the sidelines until trade war speculations become facts, the Asian bourses ended up mixed today.

  • A SX 200 is up by 0.07% to 6,1085.7
  • Shanghai index is down by 1.06% to 2,653.151
  • Hang Seng is down by 1.58% to 26,856.6

Commodity prices weren’t any better, with gold taking advantage of the dollar’s weakness while crude oil prices got hit by a bit of risk aversion.

  • Gold is up by 0.13% to $1,195.16 per troy ounce
  • Brent crude oil is down by 0.09% to $77.99 per barrel
  • U.S. WTI is down by 0.03% to $68.94 per barrel

Major Market Mover(s):

USD

The Greenback had a strong start but traders eventually paid attention to lower U.S. bond yields and the Greenback gave up its gains before the end of the session.

USD/JPY is down by 7 pips (-0.06%) to 111.98; EUR/USD is up by 13 pips (+0.11%) to 1.1635; GBP/USD is up by 13 pips (+0.10%) to 1.3079; AUD/USD is up by 5 pips (+0.08%) to .7157, and USD/CAD is down by 5 pips (-0.04%) to 1.3035.

CHF

There were no direct catalysts for the franc’s weakness, but a bit of risk-taking in the euro region ahead of this week’s Brexit talks might have dragged the safe haven lower.

EUR/CHF is up by 12 pips (+0.11%) to 1.1253; GBP/CHF is up by 11 pips (+0.09%) to 1.2650; AUD/CHF is up by 5 pips (+0.08%) to .6922, and CAD/CHF is up by 5 pips (+0.06%) to .7420.

NZD

The Kiwi also didn’t have a direct catalyst to push it higher, but the bulls got busy anyway. One potential reason is that some traders had taken intraday profits after the initial trade war-related scare in the early Asian session.

NZD/USD is up by 11 pips (+0.16%) to .6555; NZD/JPY is up by 8 pips (+0.10%) to 73.40; NZD/CHF is up by 10 pips (+0.16%) to .6340, and NZD/CAD is up by 11 pips (+0.12%) to .8544.

Watch Out For:

  • 9:00 am GMT: Euro Zone’s final CPI expected to maintain 2.0% reading
  • 9:00 am GMT: Euro Zone’s final core CPI expected retail 1.0% print
  • 9:00 am GMT: Italy’s trade balance (4.82B EUR expected, 5.07B EUR previous)
  • 10:00 am GMT: German Bundesbank monthly report
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