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Risk-off sentiment emerged the underlying theme in Asia at the start of a new week, with G20 meetings concluding over differences on the trade issues while the renewed political risks between Iran and the US propped following Iran’s President Rouhani warning to the US. More so, Trump’s comments on fx manipulation also fuelled the risks of a trade war now converting into a currency war.

 Markets reacted with a sense of cautious, as the safe-havens such as the Yen, gold and Swiss franc were heavily underpinned at the expense of the risk assets – Asian equities, oil prices and Treasury yields. The US dollar fell to a fresh nine-day low at 94.21 against its major peers, lifting the sentiment around most majors. The Yen outperformed amid risk-aversion and the latest BoJ speculation that the central bank may tweak its monetary policy stimulus at its monetary policy meeting scheduled next week. The USD/JPY pair dropped to three-week lows at 110.75 before bouncing-back towards the 111 handle. The Antipodeans traded with mild gains, as the upside remained capped amid reduced appetite for risk.

Main topics in Asia

Weekend headlines: Brexit plan proposal rejected by EU & G20 risks to growth heightened due to trade and geopolitical tensions

European Council rep: No need to remove tariffs for EU-US talks – Reuters

Iran’s Rouhani warns Trump that war with Iran is “mother of all wars” – Reuters

China Commerce Ministry to launch anti-dumping probe

BoJ: No bids tendered for Monday’s fixed-rate operation

China central bank unexpectedly injects CNY 502 billion – Reuters

Trump to Rouhani: ‘Never, ever threaten the US again or you will suffer consequences’

Asian stocks back in the red on trade fears, protectionism sapping risk appetite

New Zealand’s acting PM Peters: Inflation not sole issue facing the economy

Key Focus ahead

We have a quiet start to the week, in terms of the economic releases, with absolutely no macro data reported in the Asian session. The EUR calendar also follows suit and hence, the focus remains on the German Bundesbank (Buba) monthly report.

Meanwhile, the NA session is expected to be relatively busy, as the Canadian wholesales will be reported at 1230 GMT, followed by the Eurozone consumer confidence and the US existing home sales data dropping in at 1400 GMT. However, the Bank of England (BOE) MPC member Broadbent’s speech will hog the limelight in the NY session today.

Broadbent is due to speak about the history and future of quantitative easing at the Society of Professional Economists, in London.

EUR/USD: Put demand eases ahead of the ECB

The demand for the EUR puts has dropped sharply in the run-up to this Thursday’s European Central bank (ECB) rate decision and Draghi presser.  

GBP/USD cautiously pushing into 1.3150 despite fresh Brexit concerns

Monday is a thinly-populated schedule for economic data, with little of note for both the Sterling and the Greenback, though a speech from the Bank of England’s MPC Member Haldane is expected later in the day at 17:00 GMT.

Gold Price Forecast: Yellow metal could regain some poise

The  gold  price has recovered 1.5 percent from the one-year low of $1,211, boosting the odds of a strong corrective rally, technical charts indicate.

Australia: Headline CPI to tick up to 0.5% q/q in Q2 – ANZ

Analysts at Australia and New Zealand Banking Group (ANZ) offer their insights on the  Australian  Q2 CPI report due out this Wednesday at 0130 GMT.