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The risk-off sentiment dominated Asia starting out a fresh week this Monday, as the traders were hurt by renewed US-China trade tensions after Friday’s report that Trump  officials are weighing limits on US investors portfolio flows into China. Asian equities traded mixed while S&P 500 futures and Treasury yields, unable to lift USD/JPY further above 108.00 amid a broad-based US dollar consolidation.

Amongst the G10 currencies, the Kiwi was the biggest loser and slipped to 0.6760 levels, hurt by a sharp fall in New Zealand’s ANZ Business Confidence data for September.  The Aussie also struggled with its recovery and remained near three-week lows near 0.6750 despite upbeat Chinese Caixin Manufacturing PMI data.

Ahead of the European open, the EUR/USD pair traded modestly flat below 1.0950, with the bias still leaning to the downside. The Cable kept its range below 1.2300 ahead of the key UK political and economic events.

On the commodities’ front, Gold traded on the back foot below $ 1500 levels while oil prices traded little changed, awaiting fresh geopolitical developments for the next direction.

Main Topics in Asia

BoJ Sept meeting summary of opinions: BoJ must maintain current powerful monetary easing

NZD/USD extends losses as ANZ’s Business Confidence hits lowest since April 2008

China composite PMI for September comes as 53.1 (prev 53.0)

BOJ increases purchases of bonds maturing in 1-3 years

China’s Caixin Manufacturing PMI unexpectedly jumps to 51.4 in September

Saudi Crown Prince: Oil prices could spike to “unimaginably high numbers” if no global will to act on Iran

China’s Vice CommerceMin: China’s Vice Premier Liu to travel to US for trade negotiations

DUP’s Foster: Ready to support UK PM Johnson’s Brexit push

Overnight offshore Yuan HIBOR sees the biggest daily YTD rise

Key Focus Ahead

We have a hectic macro calendar to kick-off a big week ahead, with the German economic news to headline amid Brexit chaos and renewed US-China trade tensions. First up, the German Retail Sales will drop in at 0600 GMT, followed by the Employment data due at 0755 GMT and Preliminary Harmonized Index of Consumer Prices for September at 1200 GMT. From the UK docket, the Q2 Final GDP revision, Current Account and Total Business Investment data will be reported at 0830 GMT among other minority reports.

Later in the NA session, the second-liner Canadian data will be released at 1230 GMT, soon followed by the US regional Manufacturing data around 1400 GMT. Despite the macro news, the market mood is likely to remain at the mercy of the trade and political developments.

EUR/USD eyes third straight monthly loss, focus on German CPI

EUR/USD is on track to report the third consecutive monthly loss. The pair may print fresh 2.5-year lows on a dismal German labor market and inflation data. Italian bond yields may spike, adding to bearish pressures around the EUR.  

GBP/USD on the back foot, focus on UK politics, GDP

With the increasing odds of no-deal Brexit, the GBP/USD pair remains on the back foot near three-week lows below 1.2300 ahead of the London open. Markets eye fresh UK political developments and Q2 final GDP release.

Nobody Wins, But Germany and EU Hurt Most in Global Trade War

Germany is the global leader in exports as a percentage of GDP. It stands to lose the most in a global trade war.

Gold  Price Forecast: Charts lower high ahead of US Nonfarm Payrolls

Gold is looking heavy, having charted a bearish lower at $1,536.  The metal will likely take a hit if the US data beats estimates.  Key support is seen at $1,483 and resistance at $1,536 is the level to beat for the bulls.