Weekend headlines renewed doubts over the US-China trade deal and a soft Brexit. However, the absence of Japanese traders restricts market momentum during the early Asian session on Monday. Investors also shrugged off China’s disappointing import numbers while showing less reaction to the better than forecast trade surplus.
Trade headlines seem to have taken a halt after both the leaders agree for initial peace but the news concerning China’s rejection of the United States’ (US) diplomats’ visas keep the risk of another trade war on the cards. On the other hand, the United Kingdom’s (UK) Prime Minister (PM) Boris Johnson followed the footsteps of the European policymakers who, over the weekend, said that both the sides are still far from a deal despite noticeable progress.
With this, safe-havens like Gold and the Japanese Yen (JPY) stop their earlier declines while the commodity-linked currencies and the British Pound (GBP) also witness downside pressure. However, the Euro stays under pressure ahead of second-tier data/events whereas energy prices respect geopolitical tension surrounding Syria.
Main Tops in Asia
China September Dollar-denominated Imports drop 8.5%
Goldman Sachs sees limited upside in Yuan even after a partial trade deal - Bloomberg
China's Customs Spokesman: Exports to the US down 6% in Jan-Sep - Reuters
BOE's Ramsden: BoE might not be able to cut rates if Brexit delayed again - The Telegraph
Key Focus Ahead
Having witnessed a soft start to the week, investors might have to adjust for less volatile session s ahead considering the absence of the US and Canadian traders. Though, a speech from the European Central Bank (ECB) policymaker Luis De Guindos and Eurozone Industrial Production numbers could offer intermediate trade opportunities.
It should also be noted that the speech from the Bank of England’s (BOE) Sir Jon Cunliffe will also be looked after the latest comments from a policymaker raised questions on the central bank’s future performance.
EUR/USD stuck below 50-day MA despite US-China trade truce
EUR/USD failed to close above the 50-day moving average (MA) on Friday and is trading below the key average at press time despite the US-China trade truce.
GBP/USD under pressure as Brexit optimism losing luster
GBP/USD is facing selling pressure in the Asian session and may remain on the defensive in Europe on fading optimism for the Brexit deal.
AUD/USD seesaws around 0.6780 after China trade data
AUD/USD fails to portray a slump in China’s imports amid better than expected trade surplus. The pair takes the rounds to 0.6780 on early Monday.
USD/JPY consolidating bull rally into 108 handle on US/Sino trade deal optimism
USD/JPY starts out the week flat to Friday's close after markets rallied at the end of the week. The prospects of a full-on trade deal between the US and China as trade negotiations take shape in the form of a phase 1 deal between the two nations lifted USD/JPY to a fresh high, with bulls scoring a high of 108.62 having moved up from out of the 107 handle.
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