Risk-appetite took a hit as the Asian trades kicked-off on Monday, with markets reacting negatively to the fresh US-China trade clash at the APEC meeting over the weekend. Meanwhile, ongoing Brexit uncertainty amid increased odds of the UK PM May losing the vote of confidence further weighed on the risk sentiment.
As a result, the Yen got a fresh lift that dragged the USD/JPY pair to fresh two-week lows near 112.60 before bouncing back to 112.80 level. The Antipodeans slipped amid renewed trade tension, with the Kiwi back below 0.6850 while the Aussie attacked 0.73 handle, having failed to close the bearish opening gap. Both the EUR and the GBP traded on the back foot amid broad-based US dollar strength, as the risk-off action boosted the demand for the safe-haven greenback.
Meanwhile, the Asian stocks traded mixed, with the Japanese equities slightly higher while the Chinese equities turned lower after a positive start. The equities remained somewhat buoyed amid a rebound in oil prices. WTI traded nearly 1% higher above the 57 handle while Brent held gains above the 67 mark. Gold prices on Comex were offered below 1220, as King dollar ruled the roost.
Main Topics in Asia
Over the weekend: Trade tensions back on the rise, Brexit set for another lap
Scotland's Sturgoen: parliament should not endorse May's Brexit deal - Reuters
UK CBI President to endorse May's Brexit deal
China to launch barley anti-dumping investigation against Australia
IHS Markit: UK business morale approaching decade-low - Reuters
UK”s Johnson: UK should 'massively accelerate' preparations to exit EU on WTO terms
Italy’s Deputy PM Di Maio: EU election will shake up politics, help Italy
US VP Pence: US could double tariffs on China - Reuters News
Japan Chief Cabinet Secretary Suga: Watching US-China ties closely
ECB’s Villeroy: ECB could consider new TLTROS if needed
BoJ’s Kuroda: We are determined to continue current easing policy
Key Focus Ahead
Markets are poised for a quiet start to the EUR macro calendar this week, with no first-tier economic releases on the docket today. From the Euroland, the current account data will drop in at 0900 GMT while the construction output figures are due at 1000 GMT. The UK docket remains absolutely data-empty. The EU Financial Stability review and the Bundesbank monthly report will offer some trading impetus to the EUR, GBP traders amidst fresh Brexit-related headlines and Italian politics to drive the fx market volatility in the coming days. Besides, the ECB speaks will be closely heard, as the ECB Governing Council members Carlos Costa and Danièle Nouy are scheduled to speak at 0900 GMT and 0915 GMT respectively.
The NA session also remains a thin showing, with the only NAHB housing market index on the cards that is likely to have virtually no impact on the markets. New York Fed President Williams is due to speak at 1545 GMT.
EUR/USD: renewed US-China trade tensions may cap gains
The path of least resistance is now on the higher side. The pair, however, could fall back to ascending (bullish) 5-day exponential moving average (EMA), currently at 1.1366, courtesy of heightened US-China trade tensions.
GBP/USD struggling to hold above 1.2800 as Brexit turns bearish... again
This week brings the UK's latest Inflation Report Hearings, but with the key reading not due until Thursday, the early week is left to fend for itself against a constant stream of Brexit headlines that have once again turned bearish.
EU to say that Brexit transition extension to depend on UK's conduct - Bloomberg
The EU, however, is set to say that the transition extension will depend on the United Kingdom's (UK) conduct, according to Bloomberg.
GBP/USD Weekly Forecast: “Make it-or-Break it” time for Sterling and Theresa May
Brexit news overshadows the economic calendar events in the upcoming week with a no-confidence vote possibly coming and the European summit scheduled for Sunday next week.
RBA minutes unlikely to be a market mover – TDS
According to analysts at TD Securities, the tomorrow the minutes for the RBA November Board meeting is unlikely to make ripples.
Canadian CPI and US Markit PMIs headline Thanksgiving week – Rabobank
Analysts at Rabobank enlist key economic events slated for release in the Thanksgiving holiday-shortened week ahead.
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