Forex today was mainly driven by risk flows, with a major turnaround in the risk condition experienced amid ebbing fears over the US-China trade war. The WSJ reported that the US and China are quietly seeking trade solutions after last week’s war of words. Subsequently, the demand for the safe-havens such as the Yen, gold etc., took a hit, as the Antipodeans, the GBP cheered the return of risk-trades.
Among other related markets, oil prices traded on the back foot on the back of a rise in the US rigs count while the Asian equities extend losses, tracking Friday’s Wall Street sell-off on the US-China trade war concerns.
Main topics in Asia
The Reserve Bank of New Zealand (RBNZ) has added a jobs mandate to the Policy Target Agreement (PTA), an update to the central bank's policy targets that is signed each time a new Governor of the RBNZ is brought on board.
Incoming RBNZ Governor Orr: pleased with new target agreement
Incoming Reserve Bank of Zealand (RBNZ) Governor Adrian Orr is speaking following the release of the newly-updated Policy Target Agreement (PTA).
US, China quietly seek trade solutions - WSJ
"China and the US are negotiating to improve US access to Chinese markets after a week filled with harsh words from both sides over Washington’s threat to use tariffs to address trade imbalances", according to Wall Street Journal (WSJ).
US-China trade war opens the door for Australian exports - AFR
The Australian Financial Review (AFR) carried a story on the impact of a potential US-China trade war on the Australian trade.
Opposition party: UK must have power to stop 'no deal' Brexit - Reuters
As reported by Reuters, the UK's Labour opposition party will be demanding that the UK's parliament will have the final say in any Brexit deals, including …
US Treasury Secretary: We are going to proceed with our tariffs
The Trump administration is all set to impose tariffs on up to $60 billion in Chinese goods despite threats of retaliation from the world's second-largest economy. "We are going to proceed with our tariffs.
UK's Davis says a deal with EU is 'incredibly probable' - BBC
It is "incredibly probable" that the UK will reach a final deal with the EU, the UK's Brexit secretary, David Davis, said while speaking on BBC One's Andrew Marr Show.
Key Focus ahead
We have an absolutely quiet start to the EUR calendar this week, with no show from the Euroland while the UK sees the second-liner high street lending data, followed by the European Central Bank (ECB) policymaker and Bundesbank (Buba) Chairman Weidmann’s speech. Weidmann is due to deliver a speech titled "New Momentum for Europe" at the central bank of Austria, in Vienna.
The NA session also is data-dry, with the Fedspeaks to offer fresh incentives on the USD moves. The FOMC members Dudley, Quarles and Mester are likely to deliver their respective speeches in the American afternoon.
Meanwhile, the political and trade war tensions are going to drive the sentiment across the fx space in a relatively data-scarce week ahead.
EUR/USD geared up for a run at 1.2400
Monday represents an air-filled showing, and the EUR/USD pair is heading into the new week exposed to swings in market sentiment on trade war fears and Brexit concerns.
The relief rally in the stocks will likely gather pace if both nations soften their stance on trade. In such a scenario, the GBP/USD pair could revisit and may possibly break above the last week's high of 1.4218.
FX week ahead: Portfolio remains light on risk– JP Morgan
Heading into a new week, analysts at JP Morgan offer their outlook on the major currencies, in light of a relatively data-thin macro calendar.
Week Ahead: Continued focus on trade and politics amid light data schedule
In a comparatively light pre-holiday week ahead in terms of economic data and events, political concerns and trade war fears should continue to take center stage for both currency markets and equity investors.
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