Talking Points:
- Asian investors faced another holiday thinned session
- European politics and economics are further weighing on risk appetite
- The US Dollar made gains on most things, the Yen excluded
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Asian markets lacked a bit of direction Tuesday with Chinese and Taiwanese markets closed for holiday. The US and UK were both out on Monday.
The Nikkei 225 closed a sleepy session down just 0.02% but Australia’s ASX managed a 0.2% gain. Europe is causing a modest retreat from risk. Key elections loom in the UK after which Brexit negotiations must begin in earnest. There may be an early vote in Italy, too. Greece is calling for its creditors to help make its debt burden more sustainable. European Central Bank President Mario Draghi did Euro bulls no favors Monday when he said that accommodative monetary policy was still necessary in the currency bloc. Indeed he reportedly said that the Eurozone still needed “an extraordinary amount” of monetary support.
Asia/Pacific economic data were limited but interesting. The Yen gained a little following news of a big retail sales beat, but overall household spending still flopped. The Australian Dollar didn’t get much support from building approvals which also topped expectations, even though levels continue to subside from last year’s record peaks.
The US Dollar firmed against its major European rivals. Both Sterling and the Euro have political worries to contend with. However it lost out against the haven Yen.
Gold prices edged back up to one-month highs Tuesday around $1,270.42/ounce, reportedly as investors cast those sidelong glances at Europe. Crude oil prices slipped with the US benchmark again slipping below $50/barrel as enduring worries about a glut of supply overcame news of a strong start to the Stateside summer driving season.
There’s plenty of economic life left in Tuesday’s session with German consumer price data, along with US personal consumption and expenditure information. We’ll also get a steer on how US consumer confidence bore up this month.
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX
