Asian Stocks Down Yet Again, US Political Risk Dominates
- Asian stocks fell again, with the focus squarely on Washington DC
- The Dollar weakened too, but USD/JPY at least picked up into the Asian close
- Local data were fascinating, especially Australian labor numbers, but markets were looking elsewhere
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Asian stock fell hard and broadly once more Thursday amid US political ructions. These only got more intense with the appointment of a special counsel to head the investigation into Russia’s possible involvement with last year’s US Presidential election.
On the local-numbers front, Japanese first-quarter Gross Domestic Product data beat forecasts but found the Yen market indifferent, possibly because they are unlikely to have any impact on Japan’s ultra-accommodative monetary settings. Australia’s official employment statistics made a mockery of the economic community, with 34,700 jobs created in April when only 5,000 more had been expected. Still, this wasn’t all good news for the Australian Dollar, or indeed the Australian economy. Part-time job creation surged but full-time employment fell. The Aussie Dollar's New Zealand cousin shrugged at news of stronger consumer confidence in its homeland. Markets were firmly focused on events in the US at the time of this data release.
Crude oil prices lost about 20 cents/barrel in the case of both the US benchmark and international Brent. Clear evidence of abundant supply continues to outweigh efforts to cut production. Meanwhile Gold prices held up near two-week highs, with haven assets still in clear demand.
The rest of the global session will bring UK retail sales numbers and US initial jobless claims. The Bank of Mexico will set monetary policy and European Central Bank President Mario Draghi will speak in Tel Aviv. Markets will also here from Cleveland Federal Reserve President Loretta Mester.
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter:@DavidCottleFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.