Hong Kong shares pressured
It was a quiet session in Asia to open the week with equities performing better than other asset classes. Most indices countered Friday’s losses on Friday, eking out small gains without any particular motive driving sentiment. US indices rose between 0.20% and 0.25% but Hong Kong stocks under-performed following more weekend anti-government protests which turned violent again. The HK33 index slumped 0.75% to 28,540.
On the currency side, the yen was slightly better offered, falling 0.2% vs the US dollar and 0.07% versus the Australian dollar. The pound was steady versus the greenback as markets await the result of the Conservative Party leadership race, which will probably be known tomorrow.
GBP/USD Daily Chart
Raising the debt ceiling
The US press is reporting that the Trump Administration and legislators are close to reaching an agreement on US budget caps and the debt ceiling. The deal supposedly raises the debt ceiling for two years while spending limits would also be set for two years. It is believed that any spending cuts would be in the future and seen significantly below the $150 billion requested by the Trump Administration. Last Thursday, US Treasury Secretary Mnuchin said there could be cash issues as early as September if the debt ceiling was not raised.
Abe’s Victory, Hong Kong protests continue, Trade optimism brews and geopolitical risks drive oil and gold
Nothing to influence on the data calendar
Markets will be left to their own devices today, with hardly any key data points scheduled. From the UK we see the CBI industrial trends survey for July followed by the US Chicago Fed national activity index for June. Speeches from BOJ’s Kuroda and RBA’s Kent could be the major highlights.
The full MarketPulse data calendar can be viewed at https://www.marketpulse.com/economic-events/
OANDA Senior Market Analyst Craig Erlam previews the week’s business and market news with Jazz FM Business Breakfast presenter Jonny Hart. They discuss the next UK Prime Minister, Brexit, Bitcoin, Libra, Facebook, Amazon, Boeing, Deutsche Bank and the ECB interest rate decision.
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A seasoned professional with more than 30 years’ experience in foreign exchange, interest rates and commodities, Andrew Robinson is a senior market analyst with OANDA, responsible for providing timely and relevant market commentary and live market analysis throughout the Asia-Pacific region. Having previously worked in Europe, since moving to Singapore he worked with several leading institutions including Bloomberg, Saxo Capital Markets and Informa Global Markets, proving FX strategies based on a combination of technical and fundamental analysis as well as market flow information. Andrew began his career as an FX dealer with NatWest and the Royal Bank of Scotland in the UK.
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