Forex today kicked-off the week on a subdued note in Asia, as most majors stuck in tight trading ranges, digesting the US political drama and North Korea warnings over the US military drills with South Korea. Meanwhile, a lack of fresh economic fundamentals also left the markets side-lined. Investors also remained on the edge amid persisting moderate risk-aversion, fuelled by negative Asian equities and lower oil prices. Also, cautious trading prevailed, as attention turned towards the Jack Hole Symposium starting this Thursday.
Main topics in Asia
"Hard Brexit" would deliver GBP 135bln annual boost to UK economy
BBC carried a report from pro-Brexit Economists for Free Trade on Sunday, citing that removal all trade tariffs and barriers would help generate an annual GBP 135bn uplift to the UK economy.
Nikkei hits fresh 3-1/2 month low
Japan’s benchmark index Nikkei fell to 19,383.7 this Monday morning in Asia; its lowest level since May 2 on caution ahead of war drills in the Korean Peninsula.
China’s iron-ore rallies 6%, strongest since March 2017
Having booked nearly 7% gains on Friday, iron-ore futures on China’s Dalian Commodity Exchange (DCE) rallied another 6% so far this Monday, hitting the highest levels since March 2017.
North Korea calls US-South Korea war drills provocative, warns of nuclear war
North Korea has warned the US that its 10-day joint military exercise without Korea will be like “pouring gasoline on the fire”. It says, “the exercises will worsen the state of the peninsula”.
Key Focus ahead
Ahead of the Jackson Hole Symposium, the first half of this week remains fairly light in terms of the economic data releases from Euroland, with the German ZEW surveys and Eurozone flash manufacturing and services PMI reports due on the cards, while the UK Q2 GDP estimate and German IFO business climate will be reported in an eventful second half of the week.
In the meantime, markets look forward to the German Buba monthly report and Canadian wholesale sales data due later today for some trading impetus.
GBP/USD remains capped below 1.2900 ahead of a Big week
The GBP/USD pair managed to move further away from five-week lows reached at 1.2829 last Friday, although remains capped below 1.29 handle amid moderate risk-aversion.
Analysts at Nomura offered a preview of the week ahead.
Event risks ahead for today - Westpac
Analysts at Westpac offered the key event risks ahead for today in Asia, Europe, and Tthe US.
UK: Eyes on Q2 GDP second estimate - Danske Bank
“In the UK, the calendar (next week) is thin in terms of data releases of interest”, said analysts at Danske Bank. The key report will be the second estimate of Q2 GDP.
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