The Asian markets tracked the gains on their Wall Street peers and advanced, lifting the overall market sentiment that boosted the demand for the risk assets such as the Antipodeans at the safe-havens Yen and US dollar. The greenback posted 6-day highs just ahead of the 97 handle against its main rivals before reversing back below the last amid a recovery in the risk appetite. The Aussie swung back to test the 0.7250 upside barrier while the Kiwi looked to regain the 0.68 handle. The Yen fell back into the red zone, driving the USD/JPY pair back beyond the 113 level. Both the Euro and the GBP traded on the front amid after EU 27 endorsed the Brexit divorce deal at the Brexit Summit held on Sunday.
Meanwhile, the oil-price recovery after Friday’s massive sell-off also helped to calm the markets, with WTI over 1% higher and testing the 51 handle while Brent jumped 1.50% to 60 mark. Gold prices on Comex traded firmer above 1230, but the gains appeared capped amid risk-on.
Main Topics in Asia
It is impossible for Brexit to pass at the moment, 91 Conservative MPs are against the Agreement
Britain’s May faces hard Brexit road at home – Reuters
Italy’s Salvini hints at compromise on 2019 budget deficit goal
Gold: Bulls remain on defensive above 23.6% Fibo, but struggle through 21-D SMA
UK Labour Spox: Corbyn would “relish a head-to-head debate with PM May about her botched Brexit deal”
PBOC skips open market operations for 22 days
Senior EU Official: EU’s only Plan B is preparing no-deal Brexit
Oil: Brent has eroded 2.5-year-long rising trendline, remains below $60
BOJ’s Kuroda called on India to keep up economic reforms – Reuters
Asian stocks largely on the upside for Monday, Japan and China lead the way
Key Focus Ahead
The EUR macro calendar for today calls for a quiet start to this week, however, the central bankers” speeches will be scrutinized for any hint of a rethink about their monetary policy paths amid mounting global growth concerns in the face of the Brexit issue, Italian budget woes and the US-China trade spat.
As for today, markets will watch out for the German Ifo survey for the fresh trading impetus for the Euro while the ECB-speaks will fill-in an otherwise light EU docket. Dragh”s parliamentary speech at 1400 GMT will hog the limelight. In the meantime, speeches by the ECB policymakers Praet, Coeure and Nowotny will be released at 0900 GMT and 1230 GMT respectively.
The NA session has no relevant macro data, but the ECB President Draghi will appear again on the wires at 1600 GMT, followed by the BOE Governor Carney’s speech that is scheduled for 1830 GMT.
Meanwhile, with little in the way of market-moving data during the week, news headlines are more likely to drive the risk appetite of investors, already on the defensive after recent bouts of market volatility.
EUR/USD: Focus on Italian bonds and Draghi speech
The common currency may pick up a bid if ECB’s Draghi while speaking in the European Parliament, downplays the recent slowdown in the German economy and risks arising out of the Italian budget crisis.
GBP/USD geared for the upside from 1.2800 after successful Brexit summit
The economic calendar greeting the GBP/USD pairing on Monday is a restrained affair, with an off-topic speech from the Bank of England’s Governor Mark Carney later in the day at 18:00 GMT “¦
EURUSD in the firing line with German Ifo data due
The EURUSD is folding over as slightly weak data connects with a technical break down through 1.1400. The USD has really gone far but it is set up for some good moves this week. Get the full rundown in today’s FX Market Insight.
The Week Ahead: Trump-Xi to face-off in the main event, but plenty of other goodies on the under-card this week
While I am cautiously optimistic this weekend’s Trump-Xi meeting at the G20 will have some meaningful market impact, it seems just as likely to disappoint than to pleasantly surprise.
Australia: Capex to confirm RBA optimism – TDS
Annette Beacher, Chief Asia-Pacific Macro Strategist at TD Securities, are looking for a modest +0.5%/q (mkt +1.0%/q) for Australia’s Sep qtr real private capital expenditure (capex) while the component that feeds into GDP””plant & equipment””is expected to rise by +1%/q.
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