With Japan out on a holiday, Asia witnessed a quiet start to a new week, with the market mood cautiously optimistic, as the renewed US-China trade optimism was somewhat outweighed by escalating Mid-East tensions. Therefore, the Asian equities traded mixed while Treasury yields weakened and Oil prices jumped over 1%. Meanwhile, gold prices clocked weekly highs above $ 1520 levels, buoyed by Gulf geopolitical woes.
Amongst the G10 currencies, the Antipodeans were the top performer amid trade relief and broad US dollar weakness. The Kiwi emerged the strongest, with 0.30% gains and 0.6300 back on sight. The AUD/USD pair shrugged-off mixed CBA Manufacturing and Services PMI reports and broke higher towards the 0.68 handle. The Yen, on the other hand, was the main laggard, as USD/JPY held onto moderate gains near 107.75 region. USD/CAD traded on the front foot near 1.3270 levels, as the Canadian dollar was uninspired by the rally in oil prices.
Meanwhile, the EUR/USD pair clung to gains above the 1.1000 level while Cable consolidated below the 1.25 handle amid US-UK trade deal hopes and looming Brexit uncertainty.
Main Topics in Asia
US-China trade updates
China, US had 'constructive' trade talks in Washington - Xinhua
AUD/JPY and AUD/CHF solid in the open on trade-talk relief
Ex-PBOC Gov. Zhou: Trade disputes are seriously threatening global trade and economic growth
Republican Adelson cautioned Trump on trade war with China – WSJ
Chinese theft of trade secrets on the rise, the US Justice Department warns – CNBC
Chinese farm official: 'Good outcome' from trade talks – Yicai
Other key headlines
Tensions in Middle East are on the rise, Oil prices a major focus
NZIER’s Shadow Board divided on where OCR should be - NZIER
US Trump and UK Johnson to meet on Thursday to discuss lightning speed trade-deal - The Sun
US to unveil plan on making Treasury market more transparent - Bloomberg
ECB’s Vasle: Likely need for further action
Key Focus Ahead
It’s a quiet calendar to kick-off the week, mainly dominated by the Markit Flash Manufacturing and Services Purchasing Managers’ Index (PMI) on both sides of Atlantic. The German and Eurozone Manufacturing sector activity will be closely eyed amid the ongoing technical recession. Also, in focus remains the German Buba monthly report due at 1000 GMT.
In the NA session, traders will also await the Canadian Wholesale Sales data due at 1230 GMT alongside the US PMI releases. The main event risk for today remains the testimony by the European Central Bank (ECB) President Draghi before the Committee on Economic and Monetary Affairs of the European Parliament in Brussels, Belgium, at 1300 GMT.
Meanwhile, the geopolitical and trade developments will continue to play a pivotal role in driving the market sentiment.
EUR/USD: Mildly bid, but below key hurdle, focus on Eurozone PMIs
EUR/USD is mildly bid at press time and may gather upside traction in Europe if the preliminary German and Eurozone Purchasing Managers' Indices beat estimates. A weekly close above 1.1086 is needed to boost bullish prospects.
GBP/USD benefits from UK/US trade optimism amid UK politics
GBP/USD stays above 100-day EMA as the US-UK leaders agree over a trade deal by July 2020. Tories keep lagging behind EU’s expectations while the opposition Labour party leader Jeremy Corbyn grabbed the headlines.
Focus: Eurozone manufacturing sentiment
Next week (September 23), a first flash estimate of the manufacturing sentiment of the Eurozone, Germany and France for September will be released. In August, Eurozone manufacturing sentiment brightened slightly for the first time in a long while, but remained at very low levels.
Week Ahead: UN meeting & oil shock, repo spike aftermath
Looking ahead to the week beginning September 23rd the major event of the week is the United Nations General Assembly – or UNGA which could be a pivotal moment for Brexit.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD rebounds from session lows, stays below 1.0600
EUR/USD recovers from the session low it set in the European session but remains below 1.0600 on Tuesday. Although the US Dollar struggles to gather strength following disappointing housing data, the risk-averse market atmosphere caps the pair's rebound.
GBP/USD remains under pressure below 1.2650 after BoE Governor Bailey testimony
GBP/USD trades in the red below 1.2650 on Tuesday, pressured by safe-haven flows. BoE Governor Bailey said a gradual approach to removing policy restraint will help them observe risks to the inflation outlook but this comment failed to boost Pound Sterling.
Gold pulls away from weekly-high, holds above $2,600
Gold retreats slightly from the daily high it touched near $2,640 but holds comfortably above $2,600. Escalating geopolitical tensions on latest developments surrounding the Russia-Ukraine conflict and the pullback seen in US yields help XAU/USD hold its ground.
Bitcoin Price Forecast: Will BTC reach $100K this week?
Bitcoin (BTC) edges higher and trades at around $91,600 at the time of writing on Tuesday while consolidating between $87,000 and $93,000 after reaching a new all-time high (ATH) of $93,265 last week.
How could Trump’s Treasury Secretary selection influence Bitcoin?
Bitcoin remained upbeat above $91,000 on Tuesday, with Trump’s cabinet appointments in focus and after MicroStrategy purchases being more tokens.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.